Air India CEO Tewolde Gebremariam has initiated a review of maintenance costs for the airline's Airbus A350 fleet as it addresses a record annual loss exceeding ₹220 billion. This cost-cutting strategy is critical for the carrier to secure $1.5 billion in fresh equity from its primary shareholders, Tata Sons and Singapore Airlines.
Air India, led by new CEO Tewolde Gebremariam, is conducting an urgent review of its operational expenses, specifically targeting the maintenance costs of its Airbus A350-900 fleet. The airline, which reported a record consolidated annual loss of over ₹220 billion for the fiscal year ending March 31, 2026, is under significant pressure to improve its financial health. The current maintenance billing structure for the Rolls-Royce Trent XWB engines, managed under the TotalCare program, has been identified as an area where the carrier believes it can reduce outflows to improve its balance sheet.
The airline is in active discussions to secure $1.5 billion in fresh equity from its shareholders, Tata Sons and Singapore Airlines. This capital injection is essential for the carrier's ongoing transformation, but negotiations are proving complex. Investors and partners are exercising stricter governance and evaluation criteria, meaning the airline must demonstrate clear progress in cost control before further funds are released. Reducing unnecessary operational spending is a core requirement for gaining shareholder approval for this funding.
Beyond engine maintenance, the leadership team is looking at broader structural changes to reduce costs. One area under evaluation is the potential integration of Air India Express into the primary group structure. The CEO has suggested that merging management and engineering functions could help remove administrative inefficiencies and simplify regulatory compliance. The airline is also looking at its cargo division, where internal data indicates that only 35% of available capacity is being utilized. Optimizing this cargo business represents a significant opportunity to improve revenue generation.
The pressure on Air India is multifaceted. While the company is attempting to modernize its fleet and improve service, it faces stiff industry headwinds, including volatile fuel prices, geopolitical challenges affecting airspace, and the need to streamline a complex, integrated organization. The success of these cost-reduction measures will be a key indicator for shareholders regarding the airline's long-term financial viability.
Looking ahead, the most important updates for observers will be the outcome of the $1.5 billion funding negotiation and whether the airline can successfully implement the proposed operational efficiencies. Success in these areas will determine whether the carrier can stabilize its finances after its recent record losses.