Air India Board Approves In-Principle Integration With Air India Express to Cut Costs

Air India's board has given in-principle approval to integrate select functions with Air India Express and empowered the CEO to identify further savings, the airline said, after the group reported a consolidated loss of Rs 22,238 crore in FY26. The Financial Express reported the board backed the measures at its October 15 meeting.

Air India's Board Backs Integration With Air India Express

The integration follows the consolidation of the two airlines' brands and aims to eliminate duplication and improve resource utilisation, according to the Financial Express. The board empowered the CEO to identify additional opportunities for savings. Air India set up a dedicated, multidisciplinary cost savings team a few weeks ago to identify areas where expenditure can be reduced.

The two airlines continue to operate as separate companies, leaving scope for consolidation of selected back-end functions. These could include administration, technology, procurement and engineering management, where separate teams and systems may lead to duplication. The extent of the proposed consolidation is not yet clear.

The group's wider airline business, including Air India Express and other subsidiaries and joint ventures, reported a consolidated loss of Rs 22,238 crore in FY26, compared with Rs 10,859 crore in the previous financial year. Total income declined to around Rs 71,870 crore, while expenses rose to Rs 93,733 crore. Air India Express reported a net loss of Rs 6,767 crore on revenue of Rs 19,088 crore in FY26, with operating expenses at Rs 20,663 crore.

Amit Mittal, director at AeroIntellect Aviation, said a common air operator certificate could enable greater flexibility in crew deployment, route planning and the use of maintenance facilities. Such a move would involve regulatory, operational and human resource challenges, he said. Mark Martin of Martin Consulting said consolidation could eliminate back-end duplication, although restructuring and crew retraining may follow.

Air India Express Adds Routes as Costs Rise

Air India Express launched a direct service between Mangaluru and Ras Al Khaimah on the second day of Winter Schedule 2026, The Hindu reported. The inaugural flights carried 146 and 36 passengers, with weekly operations on Mondays and Saturdays. The airline also launched direct Kochi-Bangkok flights four times weekly from October 25, 2026, departing Kochi at 10:15 pm and arriving Bangkok at 3:55 am, The Times of India reported.

Air India's Cost Pressures Before the Board Vote

Air India's cost pressures predate the board's approval. Pakistan's closure of its airspace to Indian airlines in April 2025 forced Air India to take longer routes on several international services, increasing fuel consumption, crew costs and aircraft utilisation, the Financial Express reported. Disruptions in West Asia and fuel-price volatility have further complicated cost management.

Air India's Leadership and Loyalty Links

According to akta.pro company records, Air India Express, the low-cost subsidiary of Air India Group, now allows earning and redeeming Maharaja Points on its flights, extending the loyalty programme across the group's premium and budget segments. The same records show Air India operates 128 narrow-body and wide-body Airbus and Boeing aircraft and has an order for 470 new aircraft.

Air India's Earlier Restructuring Steps

AirAsia India was merged with Air India Express in October 2024, while Vistara was integrated into Air India the following month, reducing the group's four airline brands to two, the Financial Express reported. The two airlines continue to operate as separate companies.