Air India is evaluating a proposal to integrate key support functions like HR, finance, and IT with its subsidiary, Air India Express, to improve efficiency. The group, currently owned by Tata Sons and Singapore Airlines, reported a combined net loss of ₹22,238 crore for FY26. The move aims to cut operational overheads while keeping the two airline brands distinct.
Air India is evaluating a plan to combine key back-office operations with its low-cost unit, Air India Express. The proposed integration covers departments such as human resources, finance, information technology, and engineering. By merging these support teams into a shared services model, the airline group aims to reduce duplicate roles and improve overall operational efficiency.
This strategic shift comes as the group works to improve its financial health. For the 2026 fiscal year, Air India reported a combined net loss of ₹22,238 crore. This figure includes a standalone loss of ₹15,368 crore for the flagship carrier and ₹6,767 crore for Air India Express. New CEO and Managing Director Tewolde Gebremariam has prioritized sustainable profitability, pushing for stricter cost management to stabilize the group’s balance sheet.
Despite the behind-the-scenes consolidation, the airline group intends to keep the customer-facing models of the two carriers distinct. Air India will continue to operate as a full-service, premium carrier, while Air India Express will maintain its low-cost, budget-friendly service. This separation allows the group to cater to different travel segments without confusing passengers, while the centralized back-office structure is expected to streamline internal workflows.
The success of this plan will depend on how effectively the two entities can integrate their processes. Large-scale organizational changes often face risks, such as difficulties in cultural blending, potential delays in system integration, and the need for seamless data migration. Additionally, the Indian aviation sector faces significant challenges, including volatile fuel costs and intense competition from established players like IndiGo, which currently maintains a large share of the domestic market.
While the proposal has not yet been formally ratified, internal discussions suggest that if approved, the transition to centralized departments could take place within six months. Industry participants will likely track whether these structural changes can effectively reduce costs and help the Tata Sons and Singapore Airlines-owned group reach its long-term financial objectives.