Air India Express, the Tata Group’s low-cost carrier, has officially completed its merger with AIX Connect (formerly AirAsia India). This strategic integration aims to drive long-term profitability and create a unified budget airline under the Air India brand. Managing Director Aloke Singh stated that this move optimises operations, scales the business, and ensures better asset utilisation.
“The merger process concluded in October, and it sets the stage for a scalable network poised for sustainable growth,” Singh said, highlighting the benefits of this consolidation.
Financial performance and challenges
Air India Express faced a net loss of ₹163 crore in FY24, despite a 33% increase in income to ₹7,600 crore. Meanwhile, AIX Connect reduced its losses significantly, from ₹2,750 crore in FY23 to ₹1,149 crore in FY24. Singh emphasised that while expansion may temporarily impact profitability, the airline remains committed to sustainable growth.
Air India Express’s expansion plans
The carrier plans to double its fleet size to 175 aircraft within the next two to three years. It also aims to enhance its presence in both domestic and international markets, focusing on connecting Tier 2 and Tier 3 cities to metro hubs. Currently, 50% of its capacity serves domestic routes, catering to the rapidly growing demand in smaller cities.
“These routes represent two-thirds of the market and are among the fastest-growing segments,” Singh said.
Market consolidation and pricing strategy
Singh addressed the industry’s pricing trends, explaining that fares remain competitive despite rising costs. With 40% of expenses tied to fuel, the airline is navigating challenges without compromising on affordability.
“Rational pricing, aligned with market dynamics, ensures a sustainable business model while staying competitive for customers,” he added.
As Air India Express integrates AIX Connect, it sets its sights on becoming a robust player in India’s aviation market, focusing on operational efficiency, fleet expansion, and strategic growth.
