The holding company of the Tata Group, Tata Sons Ltd is looking to raise as much as $4 billion to infuse fresh capital into Air India and refinance costly debt.

The firm plans to raise funds through a mix of equity and hybrid debt to refinance a part of Air India’s debt and revamp the airline, the report said.

The first few months under Tata stewardship at Air India have been challenging for the aviation industry with fuel prices rising sharply and the regulator retaining curbs on fares, said experts. On the other hand, traffic has risen close to pre-pandemic levels.

Tata-- which got the go ahead to buy Air India after offering $2.4 billion -- faces an uphill task to revive a carrier that hasn’t made money since its 2007 merger with domestic operator Indian Airlines. The group already runs two unprofitable joint ventures with Singapore Airlines and AirAsia Group in the country, and has faced criticism for not running those business efficiently, even though they contribute a tiny portion to the group’s overall revenue.

Air India's market share more than halved to less than 10% last year.