Incoming CEO Tewolde Gebremariam is weighing folding Air India Express into the parent airline to cut duplicated costs after a Rs 22,000 crore loss year.
Cover image: Air India Express Boeing 737 parked on the apron near a maintenance hangar — photo by Andrew Thomas from Shrewsbury, UK, CC BY-SA 2.0, via Wikimedia Commons.
Air India's incoming chief executive is weighing folding budget subsidiary Air India Express into the parent airline, in what would be the Tata group's second great consolidation of its airline holdings. Tewolde Gebremariam, the 61-year-old former Ethiopian Airlines boss who joined Air India this month, has questioned why the group runs two airlines on separate operating permits, Bloomberg reported, citing people familiar with internal discussions.
The idea is at an early stage and would need approval from Air India's supervisory board. But the logic is blunt: the group lost about Rs 22,000 crore ($2.3 billion) in the year to March, and Gebremariam believes a single structure would cut regulatory burden and remove duplicated management, engineering and administrative functions. The Express brand would survive even if the companies combine.
Why is Air India considering merging Air India Express?
Cost. The Rs 22,238 crore consolidated loss for FY26 frames every decision Gebremariam makes, and running two airlines means two air operator permits, two sets of regulatory filings, and parallel leadership structures doing overlapping work. His question to managers, why keep "two separate airlines with distinct operating permits", suggests he sees the dual structure as overhead the group can no longer afford.
Fuel is the other pressure. Higher fuel costs were named among the headwinds facing the group, alongside the closure of Pakistani airspace and Middle East conflict disruption. Our analysis of how jet fuel costs are feeding through to fares shows why a group burning cash needs every structural saving it can find.
Who is Tewolde Gebremariam?
Gebremariam ran Ethiopian Airlines for over a decade, building it into Africa's largest and most profitable carrier, and is one of the most respected airline chiefs of his generation. He formally took charge at Air India this month, succeeding Campbell Wilson, though as a foreign national he still awaits Indian regulatory approval for the appointment.
His Ethiopian playbook matters here. He ran a disciplined multi-unit group in Addis Ababa, with maintenance, cargo, catering and training run as tight businesses around the airline. He understands both when separate units create value and when they duplicate cost. If he concludes Express duplicates rather than adds, the merger follows.
What happened the last time Air India merged airlines?
Consolidation is familiar territory. Air India merged with Indian Airlines back in 2007, a shotgun marriage remembered as one of aviation's worst integrations. The Tata-era version went better: after taking over in 2022, the group folded four airline brands into two, with Vistara merging into Air India and AirAsia India into Air India Express.
That history is why the Express brand would be kept. The group spent two years building Air India Express into its low-cost vehicle, absorbing AirAsia India and taking new Boeing 737 MAX aircraft. Dropping the brand would waste that equity. The proposal, as reported, is to merge the companies behind one permit and one back office while keeping two customer-facing brands, the same structure that made the Vistara integration work.
The backdrop, as chairman N Chandrasekaran has acknowledged, is a costly rebuild of trust and operations. Fleet renewal, compensation claims and network repair all compete for the same rupees. A merger that strips out duplicated overhead frees cash for the flying business.
What has to happen before a merger?
| Step | Status |
|---|---|
| Internal review by incoming CEO | Under way, reported September 2026 |
| Supervisory board approval | Required, not yet sought |
| Regulatory sign-off on single permit | Would follow a board decision |
| CEO's own regulatory clearance | Pending as a foreign national |
No formal Air India statement has been issued, and the sourcing is anonymous people familiar with internal meetings rather than a company announcement. Treat this as the new chief thinking aloud in his first weeks, not a done deal. But chiefs of Gebremariam's calibre rarely float ideas idly, and the arithmetic behind it is hard to dispute.
Frequently asked questions
Is Air India Express merging with Air India?
No decision has been taken. Incoming CEO Tewolde Gebremariam is weighing folding the low-cost arm into the parent group to cut costs, Bloomberg reported on 18-19 September 2026. The idea is at an early stage and would require approval from Air India's supervisory board before anything proceeds.
Would the Air India Express brand disappear?
No. Under the arrangement described in the reporting, Air India Express would retain its brand even if the combination proceeds. The merger would unify operating permits and back-office functions while keeping two customer-facing brands, similar to how Vistara was absorbed.
How much did Air India lose last year?
About Rs 22,000 crore ($2.3 billion) in the year ended March 2026. The scale of the loss is the context for the merger review, alongside higher fuel costs, Pakistan airspace closure effects and Middle East disruption.
Who is Air India's new CEO?
Tewolde Gebremariam, 61, former head of Ethiopian Airlines, who joined Air India in September 2026 succeeding Campbell Wilson. As a foreign national he still awaits Indian regulatory approval for the appointment, and his first moves, including this merger review, are being watched as a signal of his restructuring pace.
