AI, AI Express integration: Code share, route recast

Air India Express Ltd is set to sign a code-sharing agreement with Air India Ltd, pull out from all routes requiring business-class capacity, and relocate operational control centres for AirAsia India and Air India Express to a new Gurugram office starting this month, two airline executives said on condition of anonymity.

These steps are part of a strategy that includes the merger of AirAsia India and Air India Express, which will operate as Air India’s low-cost unit, offering budget flights on non-trunk routes.

“Code-share flights will help provide the much-needed connectivity strength to Air India and help the parent source international and domestic passengers from smaller cities that AI Express will operate to and not Air India,” one of the two executives said.

The person said the plan is to strengthen the low-cost play in non-trunk routes and leave trunk routes, where there is demand for business seats, to Air India.

“As part of the strategy, Air India Express has pulled out of Delhi-Mumbai, and Air India has pulled out of markets like Surat. Starting next month, Air India Express will start new flights to Goa, Guwahati and Lucknow. The flight frequencies will increase as the airline starts to induct new aircraft starting October this year,” the second executive said.

Air India Express has a fleet of 54 Airbus 320 and Boeing 737s and will add 23 Boeing 737 MAX from October by the end of the current fiscal year. The new aircraft will help consolidate the airline’s position in the international market and grow in the domestic market.

Parent Air India, meanwhile, will be focussing on strengthening its international network by inducting new Airbus 350s into its fleet, which starts to come by October this year.

The Tata group acquired Air India and Air India Express in January 2022 under a government-led strategic divestment programme. In November, the Tata group announced the merger of AirAsia India, Air India Express, and Vistara into Air India. As part of this merger, AirAsia Bhd divested its 16.67% stake in the budget airline, allowing the Tata group to snap it for ₹155.65 crore.

Meanwhile, Air India Express is shifting its base from Kochi and Mumbai to Gurugram, where the Tata group-owned airline has rented a new building that will house all airlines in the group —Air India, Air India Express (AirAsia India to be merged) and Vistara (to be merged with Air India). Employees of AirAsia India, who are based out of Bengaluru, will shift to Gurugram.

The executives said the operational control centres of Air India Express and former AirAsia India will shift to Gurugram by next month. “The new office will have a bigger space and all airline staff will get space. The current building does not have that kind of space,” a third executive said on condition of anonymity.

This is part of the strategy to integrate operations of AirAsia India and Air India Express, which the firm plans to now complete before the end of this year. The new entity will also unveil a new branding in October, Mint reported on Monday.