Air India’s incoming chief executive officer Tewolde Gebremariam is considering merging Air India Express into the wider airline group as the carrier seeks to reduce costs and address a reported loss of Rs 220 billion for the year ended March, according to a Moneycontrol report citing people familiar with the matter. The proposal remains at an early stage and has not been publicly confirmed by Air India.
According to the report, Gebremariam questioned managers in meetings across departments about the need to operate Air India and Air India Express as two separate airline companies with different operating permits. The discussions reportedly examined whether a single airline structure could reduce regulatory requirements and eliminate the duplication of managers, engineers and administrative staff.
The reported plan would not necessarily remove the Air India Express brand. The people cited in the report said the budget carrier would retain its brand name if the two companies were combined. Any merger or restructuring would require approval from Air India’s supervisory board, meaning the discussions do not represent a final corporate decision.
Air India did not respond to an email seeking comment, according to the report. The absence of an official confirmation is significant because the proposal would affect the group’s operating permits, management structure, engineering functions and administrative organisation. It could also require regulatory approvals and a formal implementation plan.
The possible consolidation comes after several years of restructuring in the Tata Group’s airline portfolio. Air India merged with Indian Airlines in 2007, before the Tata Group acquired Air India in 2022. Following that acquisition, the group reorganised four airline brands into two principal carriers: Air India and Air India Express.
The current proposal therefore concerns not only cost reduction but also the operating model created after the Tata Group’s acquisition. Air India Express functions as the group’s no-frills carrier, while Air India operates its full-service network. The report indicates that the incoming chief executive is examining whether maintaining separate corporate and operational systems continues to justify the associated costs.
The cost pressure is taking place alongside operational and market challenges. The report said Air India is dealing with the closure of Pakistani airspace to Indian carriers, disruption caused by conflict in the Middle East and higher fuel costs. It also referred to a probe after a pilot of a flight involved in a sudden altitude drop tested positive for illegal drugs. The report did not provide further details about the status or findings of that probe.
Gebremariam was selected for his record at Ethiopian Airlines Group, which he helped turn into one of Africa’s largest and most profitable airline groups, according to the report. His mandate at Air India is expected to include improving efficiency, although he still requires approval from Indian regulators to serve as chief executive because he is a foreign national.
The report also said that, in earlier meetings, Gebremariam raised concerns about Air India’s low cargo load utilisation and asked staff to prepare a plan to reduce maintenance issues. Cargo performance and aircraft maintenance are separate operational areas, but both affect how efficiently an airline uses its fleet and manages costs.
A restructuring that combines the two airlines could offer administrative savings if overlapping functions are genuinely reduced. It could also create implementation challenges involving licences, staff roles, engineering approvals, fleet planning and the distinction between full-service and low-cost operations. The supplied report does not establish whether a detailed integration plan exists or whether regulators have been formally approached.
The potential consolidation also has financial significance for Tata Sons and Singapore Airlines, which is an equity partner in Air India. The report said the move would be welcome to both entities as Air India continues to report losses and Singapore Airlines faces political criticism for supporting the carrier’s loss-making operations.
For now, the reported merger remains a proposal under discussion rather than an announced transaction. The next confirmed steps would be any formal decision by Air India’s supervisory board, regulatory approval for the proposed structure and an official statement from the airline or its parent entities.
