Air India Express Merger: CEO Considers Operational Integration to Cut Costs

Air India is exploring a significant structural shift that could see Air India Express integrated into the parent company's operating structure. According to reports from September 2026, incoming CEO Tewolde Gebremariam is evaluating whether maintaining two separate airlines—each with its own operating permit and management—is still necessary for the Tata Group's aviation strategy.

The Goal: Reducing Losses and Operational Duplication

The primary driver behind the proposed air india express merger is financial sustainability. Air India reported a consolidated net loss of approximately ₹22,238.23 crore for the financial year ended March 2026 [2]. By folding the low-cost subsidiary into the main airline's structure, the group aims to eliminate duplication across several key areas:

• Management: Consolidating leadership and administrative functions.
• Engineering: Unifying maintenance and technical support systems.
• Regulatory: Reducing the burden of maintaining multiple operating permits.

Will the Air India Express Brand Disappear?

Despite the potential operational consolidation, sources indicate that Air India Express would likely retain its brand identity [1]. This "dual-brand, single-operator" model would allow the group to continue serving two distinct market segments: the full-service experience via Air India and the value/low-cost segment via Air India Express.

Comparison: Current vs. Proposed Structure

Feature	Current Structure (2026)	Proposed Integrated Structure
Operating Permits	Separate permits for each airline	Single operating structure
Management	Independent leadership teams	Consolidated management
Customer Branding	Air India & Air India Express	Air India & Air India Express (Retained)
Back-end Functions	Duplicated engineering/admin	Unified engineering/admin

Current Status and Future Outlook

It is important to note that as of September 2026, this remains a proposal and not a finalized decision. The merger is in its early stages and requires formal approval from Air India’s supervisory board [1]. Air India has not yet publicly confirmed these plans.

This potential move follows a series of consolidations since the Tata Group re-acquired Air India in 2022. The group previously merged Vistara into Air India (completed in 2024) and folded AirAsia India into Air India Express. If approved, this latest step would represent the most significant streamlining of the group's aviation business to date.