Air India’s incoming CEO, Tewolde Gebremariam, is evaluating a merger of the no-frills Air India Express with the main airline to cut costs amid record losses, according to livemint.com. The move aims to streamline operations by consolidating the two carriers under a single operating permit, potentially reducing regulatory expenses and improving financial performance.
Tewolde has held multiple meetings across departments questioning the rationale behind maintaining two separate airline companies with distinct operating permits. People familiar with the discussions said the CEO-designate believes that merging the units would simplify the regulatory framework and operational structure. These talks are ongoing and reflect a strategic review of Air India’s cost structure.
This potential merger comes as Air India faces significant financial challenges, with losses mounting in recent quarters. Combining Air India Express, a low-cost carrier, with the full-service Air India could align with broader industry trends where airlines seek operational efficiencies through consolidation. The move could also enhance competitiveness against other Indian and international carriers operating in the budget and full-service segments.
The final decision on the merger will depend on regulatory approvals and internal assessments. Air India’s management has yet to announce a formal plan, but the CEO’s inquiries signal a possible restructuring effort aimed at stabilizing the airline’s financial health, as reported by livemint.com.