Air India (AI, Delhi International) will borrow INR180 billion rupees (USD2.18 billion dollars) to refinance its existing debt over the short term according to India's Economic Times newspaper. The one-year loan, taken out by owner Tata Sons, is designed to cover the airline until it locks in longer-term financing later this year.

"Tata decided to continue with the existing borrowing arrangement for another year, though they will eventually make a long-term debt strategy. The loans are at a higher rate than last time, mirroring the sharp rise in the interest rates in the last year," an unnamed source told the newspaper.

The lenders are the State Bank of India and the Bank of Baroda. Air India is one of four airlines owned by Tata Sons and is undergoing a restructuring that involves an overhaul of its operations and fleet. The airline is also merging with Vistara (UK, Delhi International) over the next 12 months. "The company (Tata Sons) wants to complete all formalities before they look at firmer banking partnerships, which will be long-term in nature and most likely include a mix of public sector and private sector banks," the source said.

In January 2022, Tata Sons secured short-term funding comprising INR100 billion (USD1.2 billion) from the State bank of India and INR50 billion (USD604.2 million) from the Bank of Baroda at 4.25% per annum. The cost of borrowing has increased since then and the newspaper reports that this refinancing package will come with an interest rate of approximately 6.25% per annum.