Air India is examining a plan to share several core functions with its low-cost subsidiary Air India Express, in a cost-cutting push that could reshape how the two carriers operate behind the scenes, according to people familiar with the matter.
The review covers common teams in human resources, finance, information technology and engineering, areas where overlapping structures can add cost and slow decision-making. The idea is to identify functions that can be centralised or jointly managed without undermining the distinct operating models of the full-service and low-cost airlines.
Integration Push
The proposal comes as the Tata-owned group continues to rationalise a sprawling aviation portfolio that was rebuilt after Air India's return to private ownership in 2022. Since then, the airline has been under pressure to modernise operations, cut legacy inefficiencies and improve financial performance in a highly competitive market.
Sharing back-office functions is a familiar playbook in airline restructuring, especially when a group controls multiple carriers with different brands but similar administrative needs. In Air India's case, the logic is straightforward: reduce duplication, standardise processes and extract scale benefits from a larger combined network.
The review is still at an early stage and no final decision has been announced. But the direction of travel is clear. Management is looking for ways to tighten control over costs while preserving the separate customer propositions of Air India and Air India Express. That balance matters. Air India is being positioned as a full-service international carrier, while Air India Express operates as a low-cost airline focused on price-sensitive travellers and regional connectivity.
Any move to share teams would likely be designed to stay largely invisible to passengers, but it could have significant implications for internal reporting lines, procurement, systems integration and workforce planning. For a group still in the middle of a long transformation, such changes can be as consequential as fleet orders or route launches.
Cost Discipline
The review also reflects the broader pressure on Indian airlines to defend margins in an environment of volatile fuel costs, intense fare competition and rising capital expenditure. Even as demand for air travel remains strong, carriers are being forced to look harder at unit economics and overheads.
For Air India, the push for efficiency is especially important because the airline is trying to restore credibility after years of underinvestment and service issues. The carrier has announced ambitious plans to refresh its fleet, improve punctuality and upgrade customer experience, but those goals require a stronger cost base. Shared functions could help free up resources for operational priorities.
The engineering review is particularly notable. In aviation, maintenance and technical support are among the most expensive and operationally sensitive functions. If the group can align engineering oversight across the two airlines, it may be able to improve aircraft utilisation, reduce downtime and negotiate better terms with vendors and service providers.
Finance and IT are also natural candidates for consolidation. Unified systems can improve data visibility, simplify compliance and reduce the burden of maintaining parallel platforms. Human resources, meanwhile, is often central to any integration effort because it shapes hiring, training, payroll and organisational design.
Still, such consolidation is rarely frictionless. Airlines with different business models often need tailored processes, and any attempt to merge support functions can trigger concerns about role overlap, reporting complexity and cultural fit. The challenge for Air India will be to capture savings without creating bottlenecks in a business where speed and reliability are critical.
Wider Aviation Stakes
The review has significance beyond the two airlines themselves. Air India is one of the most closely watched corporate turnarounds in India, and its restructuring is being viewed as a test case for how the Tata Group can build a globally competitive aviation platform from a legacy state carrier.
A successful integration of shared functions could strengthen the group's ability to compete with domestic rivals and international carriers alike. It could also signal that the airline is moving from emergency stabilisation to a more disciplined phase of long-term optimisation.
At the same time, the effort underscores a broader reality in Indian aviation: growth alone is not enough. Carriers must now prove they can scale efficiently, especially as the market matures and investors demand clearer paths to profitability.
For Air India and Air India Express, the review of common HR, finance, IT and engineering functions is less about headline-grabbing expansion than about building a leaner operating model. If executed well, it could become one of the more important, if less visible, steps in the airline's turnaround.
The companies have not publicly detailed the scope or timing of any changes. But the fact that such functions are under review suggests the group is prepared to make deeper structural adjustments in pursuit of lower costs and better coordination across its airline portfolio.