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Air India Integrates Functions Amidst Rs 22,238 Cr Loss
28 Oct
Summary
- Air India aims to reduce costs and duplication by integrating functions.
- Consolidated loss for the airline group reached Rs 22,238 crore in FY26.
- Previous mergers reduced the group's brands from four to two.
Air India is planning to merge selected functions with Air India Express as part of a cost-saving initiative. This comes as the airline group reported a significant consolidated loss of Rs 22,238 crore for the fiscal year 2026, a sharp increase from the previous year.
The decision to integrate operations was supported by the board on October 15. This step is a continuation of the Tata group's strategy to consolidate its airline businesses, having already merged AirAsia India with Air India Express in October 2024 and Vistara with Air India in November 2024.
Potential areas for consolidation include administration, technology, procurement, and engineering management. Streamlining these functions could lead to better resource utilization, improved purchasing power, and reduced operating expenses. The specific extent of this consolidation remains unclear.
The airline group's financial performance deteriorated significantly, with total income at approximately Rs 71,870 crore and expenses rising to Rs 93,733 crore in FY26. External factors like Pakistan's airspace closure in April 2025 and fuel price volatility have further complicated cost management efforts.
