Air India shifts smaller-city routes to Air India Express

Tata Group is moving regional and price-sensitive domestic services from Air India to Air India Express, while concentrating the full-service carrier on metro hubs and long-haul international routes.

— Source publishedWed, 9 Sept, 2026, 05:50 IST·First seen Wed, 9 Sept, 2026, 05:53 IST·Source Mint

What happened

Tata is shifting smaller-city and select domestic routes from Air India to Air India Express, positioning the full-service carrier around metros and long-haul

Key facts

  • Air India exited seven smaller-city markets in August
  • Air India Express began services at six of these destinations on 1 September
  • Air India Express operated 46 domestic and 17 international stations with 474 daily flights in FY26
  • Air India Express added 16 destinations between FY26 and FY27 year-to-date
  • Air India Express carried over 26 million passengers in FY26, including nearly 20 million domestic
  • Combined Air India and Air India Express FY26 net loss: ₹22,238 crore
  • Combined FY26 revenue: ₹71,870 crore, down nearly 9%
  • Air India FY26 loss: ₹15,368 crore
  • Air India Express FY26 loss: ₹6,767 crore
  • Air India Express fleet: 108 aircraft in FY26
  • Air India fleet: 185 aircraft in FY26

Why this matters

Tata is building a more complementary airline portfolio, creating a cleaner platform for fleet allocation, route expansion, and potential consolidation of overlapping operations.

What to watch

  • Further Air India route exits or Air India Express launches in tier-2 and tier-3 markets.
  • Changes in through-ticketing, baggage transfers, loyalty accrual and minimum connection times between the two carriers.
  • Domestic load factors, yields and cancellation rates on transferred routes after the first two to three months.
  • Air India narrowbody redeployments toward metro hubs and international destinations.
  • Competitor capacity additions by IndiGo, Akasa Air and SpiceJet in vacated smaller-city markets.
  • Evidence of aircraft-delivery delays, engine constraints or crew shortages that could make the restructuring capacity-led rather than strategy-led.
  • Shift additional tier-2 and tier-3 domestic routes, especially low-yield point-to-point sectors, from Air India to Air India Express.
  • Concentrate Air India domestic capacity on Delhi, Mumbai, Bengaluru and other hub banks designed to feed long-haul departures.
  • Rationalize overlapping Air India and Air India Express frequencies and redeploy freed narrowbody aircraft to international, high-demand trunk, or hub-feeding routes.
  • Expand Air India Express ancillary revenue, bundled fares and cross-sell of Air India international itineraries to protect yield on price-sensitive traffic.
  • Use loyalty, codeshare and interline integration to retain smaller-city passengers within the Tata aviation network.

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