New Delhi: As per news, Air India is mulling to merge its low-cost branch, Air India Express with its sister company, the main line. The idea is part of a bigger plan by new CEO Tewolde Gebremariam to bring down costs at the struggling carrier.
Gebremariam’s stint at Ethiopian Airlines was previously ended and he joined Air India as Managing Director and CEO this year. He’s succeeding Campbell Wilson, who is eminently qualified to take over, after he guided the airline through several years of important changes.
Air India was previously owned by the government and then it became a part of the Tata Group in 2022. Tata has since attempted to reform Air India, by amalgamating the four separate airlines into two the full-service carrier Air India, that was then merged with Vistara, and the budget airline Air India Express, which merged with the AirAsia India.
However, the airline group is continuing to suffer significant losses. Combined, Air India and Air India Express suffered a loss of nearly Rs 490,000 crore in the four years between 2023 and 2026 and the most recent year alone saw a loss of over Rs 22,000 crore the worst since the acquisition by Tata. The airline has been facing additional costs due to the high cost of fuel, increased flight distance after Pakistan’s airspace was shut for Indian airlines as well as the mounting tension between West Asian and Pakistan.
To address this, Air India’s board has already considered variable measures to reduce the expenditure like the decision to keep the staff on unpaid leaves and postponing the payment of their bonuses. Incorporation of Air India Express in the main airline will be yet another step to remove the redundancy in costs and streamline the operations.
Gebremariam inherits a firm that has completed the bulk of its restructuring efforts, but has yet to make the changes into a solid profit. One of the reasons Tata chose him for this tough role is his time at Ethiopian Airlines where he doubled the airline’s revenue and fleet in 11 years.
No final confirmation over the merger of the two airlines is yet out and Air India has not officially confirmed the plan.
