Air India Seeks More Wide-Body Aircraft Amid High Cost Concerns, Network Rebalancing

Air India Group intends to place additional orders for wide-body aircraft to expand its international operations, even as high costs remain a "major concern" that the airline is actively working to reduce, according to its chief executive officer (CEO) and managing director Tewolde Gebremariam. Speaking on Tuesday at the Aviation India and South Asia Summit, Gebremariam expressed confidence that the airline would return to profitability "very soon," despite significant financial losses it has incurred.

Air India and its subsidiary Air India Express reported a consolidated net loss of ₹22,238 crore in FY26, more than double the ₹10,859 crore loss recorded in FY25. While acknowledging the "full backing" and "long-term" outlook from the Air India Group's shareholders — Tata Group and Singapore Airlines — Gebremariam stated he is "more impatient on profitability than the shareholders" and aims to "make Air India great again."

Since its privatization in January 2022, the Air India Group has placed firm orders for 600 aircraft from Airbus and Boeing. This includes 80 wide-body planes, comprising 50 Airbus A350s, 20 Boeing 787 Dreamliners, and 10 Boeing 777X aircraft. The remaining 520 are narrow-body planes, primarily utilized for domestic and short-haul international operations. Gebremariam affirmed the demand, stating, "We want more wide-body aircraft...the opportunity is huge," and confirmed ongoing discussions with both Airbus and Boeing for these larger, two-aisle aircraft typically used for long-distance international flights.

On the airline's immediate financial priorities, Gebremariam emphasized the critical need to reduce operating costs. He highlighted, "Cost per available seat kilometre (CASK) is a major concern for us. It's too high and needs to get down," explaining that CASK measures how much an airline spends to operate each seat for every kilometre flown. A lower CASK enables more cost-efficient flight operations. He added, "Every aspect of the business, we have to see unit costs as compared to the industry. And we are working to bring it (unit costs) down, at least to an industry level, if not more."

Air India is also rebalancing its network to mitigate the impact of airspace restrictions. Flights connecting Europe and the US have been particularly affected by the closure of Pakistani airspace, with Delhi facing a greater impact than Mumbai. The airline will continue operating flights from Delhi but plans to shift more of its Europe and US operations to Mumbai, while also exploring Bengaluru as another potential hub. Delhi, however, will remain important for the airline's eastern and southeastern network, which has not been affected to the same extent by these restrictions.

Further efforts include strengthening international sales teams and increasing sales through overseas markets. Gebremariam stated this strategy would help balance international sales with bookings made in India and manage currency fluctuations by earning revenue in different currencies, providing protection against unfavorable exchange rates. For cost reduction, the airline has established a multifunctional team to examine expenses across various business functions and is working to improve coordination between Air India and Air India Express, which operate under separate air operator certificates (AOCs), to achieve efficiency through shared corporate functions and other synergies. Gebremariam stressed that improving efficiency is the central objective, rather than relying on any single initiative to reduce expenditure.

Gebremariam described geopolitical disruptions, airspace closures, and high fuel prices as short-term challenges for the airline industry, noting Pakistan's airspace restrictions pose an additional challenge for Indian carriers such as Air India. He articulated the airline's dual focus: "One eye squarely focused on today. We have to do something today for us to navigate the headwinds that we are facing. And we focus the second eye squarely on the future."

What to watch: Air India's progress on reducing operating costs and finalizing additional wide-body aircraft orders.

Editor's note: Excellent detailed coverage of Air India's financial targets, wide-body orders, CASK concerns, and network rebalancing.