Public sector Air India's New York office transferred $300,000 to a bank account in Nigeria instead of remitting the sum to a US-based firm Pratt & Whitney for supplying spare parts.
The incident is learnt to have taken place in June, 2017 but the airline has failed to get the amount retrieved from the Nigerian bank account.
"The officers involved in the lapse were never punished. They have in fact been allowed to rise in their career," said an executive.
In response to an email query, Air India said the matter is currently under investigation.
"It was a case of cyber fraud. The matter is being investigated," an airline spokesperson said.
A large number of cyber frauds worldwide have been traced to Nigeria and Air India could have also fallen victim to it.
Air India has a large fleet of Boeing aircraft including B777s and Dreamliner that it flies to various destinations in the US and Europe. The local office in the US makes payments for various ancillary works.
It operates flights to San Francisco, New York and Newark in the US.
Some of the airline's aircraft in India are grounded for want of spare parts. In the face of severe cash crunch, the airline has failed to put the grounded aircraft back into operation.
Last week, the government said that it wants almost 700 airline employees in the posh Vasant Vihar colony in south Delhi to look for alternate accommodation, indicating that the Air India disinvestment plan is very much on even in the middle of the general elections.
There are a total 810 flats in the Vasant Vihar housing colony for Air India employees out of which 676 flats are currently occupied.
Cash-starved Air India has, however, proposed to ease the burden of its employees who have to vacate the company's residential complex which is going under the hammer.
The airline currently has a total debt of about Rs 55,000 crore which includes long-term loan taken for aircraft acquisition and working capital loans.