Air India Profile

Overview - Air India

Air India, the state-owned national flag carrier, first launched as Tata Airlines in 1932. The carrier was nationalised in 1953 and has been in Government hands since then. Air India was designated to operate primarily international routes, while its state owned counterpart, Indian Airlines, focused on domestic and shorthaul regional services. In Mar-07, the Government approved plans to merge Air India and Indian Airlines, to create one of Asia's largest airlines by fleet with over 110 aircraft, a stronger international and domestic network and the potential to generate operational efficiencies. The formal merger is expected to be completed in Aug-07, however integration of operations is expected to take another 18-24 months. The merged airline will be known as Air India and will fly with a new livery combining elements of both carriers.

The carrier has a low cost subsidiary, Air India Express, operating regional international routes to the Gulf and Southeast Asia. Following the merger with Indian Airlines, Air India Express also plans to launch domestic routes and absorb Indian’s regional arm, Alliance Air.

Until recently, Air India suffered from years of underinvestment, with limited fleet expansion or upgrades to inflight product. However, with a renewed government commitment to developing Air India as a major global airline, approval was granted to order 68 new Boeing aircraft in Apr-05. This included 50 long haul B777/787 aircraft for Air India and 18 B737-800s for its low cost subsidiary. The long haul aircraft, the first of which was delivered in Jul-07, allowed Air India to launch its first non-stop service to the USA on 1-Aug-07. Prior to this, all services operated via Europe due to range restrictions of the fleet.

The merger process will undoubtedly be difficult as all mergers are, but it certainly makes sense on paper. If managed well, Air India has the opportunity to emerge as one of the leading airlines in the region with an extensive network, and a likely target for one of the global alliances (Air India is in advanced discussions with Star Alliance) , but there will be numerous challenges along the way.


Last updated 2 August 2007

Copyright Centre for Asia Pacific Aviation

Other Air India News