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Air India Express Eyes First Post-Privatisation Operating Profit by FY26 End

Air India Express is projected to report its first operating profit in the second half of FY26, marking a key financial turnaround since its privatisation. The airline attributes this to improved unit economics, cost discipline, and a sharp commercial strategy. Management plans to triple its scale by FY31, operating 300 aircraft and targeting a 25% market share. It is positioning itself as a unique 'value carrier' and is investing heavily in a retrofit program while leading in on-time performance.

Key Points: Air India Express Projects First Operating Profit Post-Privatisation

  • First operating profit since privatisation
  • Strategy as a 'value carrier' not LCC
  • Aims to triple scale and reach 300 aircraft by FY31
  • NPS and On-Time Performance at all-time highs
2 min read

Air India Express projects first post-privatisation operating profit in second half of FY26, say sources

Air India Express expects its first operating profit in H2 FY26, driven by strategic growth and a 'value carrier' model, aiming to triple scale by FY31.

"value carrier positioned between an FSC and an LCC, with a premium, differentiated experience - Air India Express Management"

New Delhi, February 5

Air India Express is projected to report an operating profit in the second half of the current financial year, marking its first such financial milestone since privatisation. The airline management attributed this projected turnaround to a series of strategic initiatives implemented throughout the year.

According to sources, during a monthly town hall meeting at the airline's headquarters, leadership shared that the anticipated operating profit reflects improving unit economics, disciplined cost management, and stronger operational performance.

Addressing teams across various functions, the company's top officials noted that a focused commercial strategy and sharper capacity deployment have started yielding results. The management underlined that ongoing investments in fleet, systems, and people are aimed at building a scalable and resilient airline.

Highlighting the long-term vision, the officials noted that while operating profit is an important achievement, the focus remains on sustaining performance, improving margins and delivering dependable service.

The airline has experienced significant growth since privatisation, with its Available Seat Kilometres nearly doubling and its market share tripling. The management outlined plans for exponential growth, aiming to triple its current scale by FY31. By that period, the airline intends to operate a fleet of 300 aircraft and secure a 25 per cent market share.

Sources stated that the strategy for Air India Express is not to function as a Full-Service Carrier or a Low-Cost Carrier, but rather as a "value carrier positioned between an FSC and an LCC, with a premium, differentiated experience." To support this positioning, the airline is investing over USD 70 million in a retrofit program.

Operational metrics indicate a transformation in customer experience, with the airline's Net Promoter Score (NPS) reaching an all-time high. Air India Express has also maintained the highest On-Time Performance in India, ranking first for the past two months.

Currently, the airline stands as the second-largest carrier in India in terms of domestic routes and international routes. Its network includes 110 domestic routes and 75 international routes, maintaining a nearly even allocation between international and domestic sectors at a ratio of 54:46.

The management reiterated its commitment to prioritising operational excellence and customer experience while maintaining financial discipline.

In 2021, the Government announced that the Tata group made a winning bid of Rs 18,000 crore for Air India. Subsequently, on October 25, 2021, the Indian government inked a share purchase agreement with the Tata Group for the handover of Air India.

On January 27, 2021, the Tata group took ownership of Air India.

- ANI

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Reader Comments

P
Priya S
Good to see the focus on customer experience with the NPS and OTP improvements. As a frequent flyer on their Kochi-Dubai route, I have noticed the change. Crew is more professional, flights are on time. Hope they keep it up and don't get complacent.
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Aman W
"Value carrier positioned between an FSC and an LCC" - This is a smart strategy. Indians want good service but are also price-sensitive. If they can deliver a premium experience without the full-service price tag, they will capture a huge market. The retrofit investment makes sense.
S
Sarah B
While the projections are positive, let's see if they actually deliver the operating profit. The aviation sector in India is brutally competitive with thin margins. Tripling the fleet to 300 aircraft is an incredibly ambitious target. Hope their expansion is sustainable and doesn't lead to over-leverage.
K
Karthik V
The growth numbers are impressive – ASK nearly doubled, market share tripled! This shows the pent-up demand for reliable air travel, especially to Gulf countries from South India. More competition is always good for us passengers. Bring on the new routes and better fares!
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Nisha Z
My main concern is whether this profit will come at the cost of employee welfare. There were many reports of restructuring and uncertainty after the takeover. I hope the management's "investment in people" is genuine and leads to stable, well-compensated jobs for the staff who have stayed through the transition.

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