Air India Express absorbed loss-making AIX Connect to scale up (interview)

What was changed

In a December 2024 interview with PTI, Air India Express managing director Aloke Singh says the Tata Group's low-cost carrier completed its merger with AIX Connect, formerly AirAsia India, in October 2024. The aim was a single budget airline under Air India and the pairing, he says, will speed the path to profitability through scale, cost optimisation and better asset use. Tata now runs two distinct airlines: Air India Express as the low-cost carrier and Air India as the full-service airline merged with Vistara.

Figures cited in the article: Air India Express reported a net loss of Rs 163 crore in FY24 against a profit of Rs 117 crore in FY23, even though income rose 33% to Rs 7,600 crore, because expenditure rose 38.3% to Rs 7,763 crore. AIX Connect cut its net loss to Rs 1,149 crore from Rs 2,750 crore, which the article reads as early integration benefits.

Singh says the airline plans to double its fleet to 175 aircraft within two to three years, with 50% of capacity domestic and a focus on connecting Tier 2 and Tier 3 cities to metro hubs. He says expansion may temporarily weigh on profit because new routes need offers and promotional fares.

Why it worked

One unified low-cost brand gives the airline scale and a cleaner split from the full-service Air India.

Integrating a loss-making carrier spreads fixed costs and aircraft over a bigger network.

Tier 2 and Tier 3 city routes, about two-thirds of the market, are described by the MD as the fastest-growing segment.

What can be applied

Folding a loss-making sister carrier into a larger low-cost brand buys scale and cost leverage, but the combined airline can still post losses while it builds new routes.

Aftermath

The interview offers outlook, not a profit: Air India Express itself was loss-making in FY24, and Singh says growth could keep profits under pressure while new routes mature, with fuel at 40% of costs not matched by fare increases.