Air India CEO considers merging Air India Express to cut losses

Air India's incoming CEO Tewolde Gebremariam is exploring merging the budget carrier Air India Express into the main airline group, people familiar with the matter told Bloomberg. The CEO-designate argues that a single airline group would lower regulatory requirements and reduce the need for separate managers, engineers, and administrative staff. Air India Express would retain its brand name in a combined entity, but the idea is at an early stage and requires board approval.

The cost-cutting push comes after Air India posted a consolidated loss of Rs 22,000 crore ($2.3 billion) for the year through March 2024, according to the reports. Reducing losses is critical for parent Tata Sons, which faces internal governance debates and regulatory pressures for a potential public listing. Gebremariam, who officially joined this month, still needs regulatory clearance as a foreign national. He also faces challenges including closed Pakistani airspace, the Middle East conflict, and a regulatory probe after a pilot tested positive for drugs.