Air India’s new reality is brutally simple. This is no longer one lumbering state carrier. It is two ambitious airlines, on two separate P&Ls, answerable to one board. Both Air India and Air India Express now have to earn their keep. Nostalgic duplication and parallel services are a luxury they can’t afford anymore.
Under government ownership, the system could live with that waste. You had metal flying the same sectors with different brands, sometimes three daily flights to one station split between mainline, Express and even Alliance, with no coherent logic beyond legacy schedules and political pressures. Losses were absorbed into the exchequer, inefficiencies were someone else’s problem.
Now that era is over. Since the Tata takeover, the group has been explicit. Air India is the full‑service, premium and long‑haul carrier. Air India Express is the low‑cost, high‑efficiency narrowbody engine for domestic and short‑haul international. But that doesn’t mean Express is a dumping ground for 'cheap' routes. It means both have clearly defined roles, and both must be run commercially without hiding behind each other. Also that doesn't mean mainline cannot fly Budget operations, like recently it announced, and did. That's evolving to the right mix.
You can see the new discipline in how Express keeps repeating the same core idea, the airline’s job is to occupy the space between the metros and Tier 2, Tier 3 cities, and between those cities and the short‑haul international markets of the Middle East and Southeast Asia. That’s where more than two‑thirds of India’s addressable market lives, and that’s where the value model works. That's what most of the airlines learned recently and have already begun operating. Simple product, tight turns, low unit costs, and fares that stimulate demand in a very price‑sensitive environment.
But the LCC model of the Air India Express has an advantage because of its new narrow-bodied fleet, which is cheaper to operate, could keep the airline lean and react at the spur of the moment which the mainline does not have. But while turning to Budget operations, the Air India leadership has also attempted that given the premium airline status, the mainline could also focus on rising price-sensitivity and could turn around and compete like an LCC. Like Air India opted to rationalise long-haul loss-making operations due to conflicts in West Asia. In other words, even within the group, Express doesn’t exist to subsidise bad full‑service decisions, nor does Air India exist to promote Air India Express on the certain routes. It exists because on many routes, only an LCC cost base can sustain any capacity at all and only many routes premium service operations are sustainable and wherever they are sustainable, does that get a priority, it is something that Air India Board could tell.
Air India’s leadership has been stressing the point that domestic and short‑haul international flights are the majority of the aircraft that are coming in are narrow‑body ones, and a network with full service strengthens connectivity through AI hubs to bring traffic from Southeast Asia and the Indian subcontinent into corridors to Europe and North America, while Express feeds those hubs from smaller cities and operates point‑to‑point where that makes sense.
What that adds up to is not a wall between the two airlines, but a division of labour.
Air India should be playing the premium, hub‑to‑hub, and higher‑yield regional game, Delhi–Singapore, Mumbai–Bangkok, Bengaluru–Dubai, plus trunk routes to major Asian, Gulf and SAARC hubs where connectivity and product justify a full‑service proposition. Air India Express should be playing the mass, value and emerging hotspot game from Surat–Sharjah, Lucknow–Dubai, Jaipur–Bangkok, Coimbatore–Singapore, and dense domestic metro–non‑metro links where a low‑cost structure is the only sustainable option.
The key is consonance, not competition. The new reality, narrowbody capacity across domestic and short‑haul international is divided almost equally between the two airlines, but Express’ domestic capacity is growing faster, and 80% of that domestic capacity is now metro‑to‑non‑metro, metro‑to‑Tier 2/3-the largest and fastest‑growing segment.
And this is where loss‑absorption becomes critical. Even under a common parent, Air India Express cannot and should not be used as a sponge to soak up losses for mispositioned full‑service flying. If Express is forced into semi‑premium roles or mispriced routes just to maintain group presence, it loses the very cost advantage that makes its model work. A low‑cost carrier that stops behaving like one quickly becomes just a cheap brand painted on an expensive cost base.
Equally, there will be medium‑haul and even selected long‑haul markets where the Express model might be the right tool. Look what VietJet is doing. Dense leisure flows with limited premium demand, where an all‑economy MAX or A321neo can do the job more profitably than a half‑empty widebody. There’s nothing in the model that says a low‑cost carrier must be short‑haul forever what matters is that it stays low‑cost when it ventures further. At the same time, who stops the LCC to provide premium service on 'demand' at a premium, this is how our markets are evolving.
The hard constraint is that both balance sheets now have to carry their own weight. Air India has already shown a willingness to rationalise long‑haul when the economics break. In May 2026 it announced temporary suspensions and reductions on several international routes, including Delhi–Chicago, Delhi–San Francisco and Delhi–Toronto, explicitly citing airspace curbs and high fuel prices. That’s exactly the kind of decision the old, government‑run Air India often delayed or ducked, sometimes running multiple sub‑scale services to the same region in parallel.
In the new structure, you don’t have the luxury of three different Air India brands each flying a separate flight to a location at odd times of day just to be 'present.' You pick the right operator for each mission. If the route is high‑yield, connectivity‑critical and brand‑defining, mainline Air India flies it and where the route is price‑sensitive, high‑volume and structurally suited to an LCC, Air India Express flies it, and it, too, is expected to cover its cost of capital. If neither can do it profitably, the route goes. There are no political compulsions to run flights into cities where all major political party leaders come from and pick up the tab.
The story, then, is not Air India vs Air India Express. It’s that for the first time in their history, both are being forced to behave like airlines in a competitive market, not departments in a ministry. That means playing LCC where the market demands it, playing premium where the value exists, and being willing to let Express take medium‑haul or even longer sectors when the numbers say so without ever forgetting that a low‑cost airline that stops being low‑cost stops being viable.
In the Tata era, Air India’s two wings share one board and one strategic goal. But the days when one wing could quietly bleed so the other could posture are gone. That’s not a constraint on the turnaround that’s the only way it becomes real.