Air India is reviewing its aircraft maintenance expenses as Chief Executive Officer Tewolde Gebremariam steps up efforts to improve the airline’s financial performance. The carrier has flagged concerns with suppliers over maintenance costs that have reportedly turned out higher than anticipated when the agreements were signed. Air India uses Airbus Flight Hour Services and Rolls-Royce’s TotalCare maintenance programme.
The review comes as the Tata-owned airline faces mounting financial pressure after reporting a record annual loss of more than INR 22,000 crore in the last fiscal year. Air India is seeking INR 10,000 crore in funding from its owners, Tata Sons and Singapore Airlines, both of which face scrutiny over the prospect of providing additional financial support.
Gebremariam has also asked employees to develop a plan to reduce maintenance-related problems, particularly given the relatively young age of the airline’s fleet. Improving cargo operations is another priority, with the airline reportedly using an average of around 35% of its cargo capacity, according to people familiar with the matter.
As part of the broader cost-reduction effort, Gebremariam has established a committee to identify savings across Air India and its low-cost subsidiary, Air India Express. According to reports citing sources, the measures under consideration include rationalising certain teams across the two airlines and relocating Air India Express office space to reduce lease expenses. The airline’s board is also expected to discuss cost-saving measures.
The airline is exploring operational consolidation as another potential route to reducing expenses. A proposal to bring Air India Express under a single group structure with Air India is reportedly at an early stage, with the budget carrier’s brand potentially retained. The proposal could reduce duplication and simplify certain administrative and regulatory requirements, although no final decision has been announced.
Gebremariam has emphasised cost discipline, sustainable profitability, safety and operational reliability as key priorities. He has also proposed employee incentive programmes to reward ideas that deliver measurable savings and improve efficiency. The cost-cutting drive aligns with Tata Sons’ focus on consolidating Air India’s operations and slowing expansion while the airline works towards improving its financial performance.