Our Bureau
New Delhi
Air India is preparing to scale back parts of its ambitious expansion strategy as mounting financial losses prompt its owner, the Tata Group, to prioritize cost control and operational efficiency, according to reports.
The airline, which returned to Tata ownership in 2022, is considering measures including deferring aircraft deliveries, reducing flight operations on select routes and postponing expansion plans after recording one of the largest losses in its history. Reports indicate that Air India posted annual loss of nearly $3 billion, raising concerns within the Tata Group about the pace and cost of the carrier’s transformation.
Sources familiar with the matter said the airline is seeking to delay the delivery of about 500 aircrafts ordered from Airbus and Boeing as part of a broader effort to conserve cash and stabilize finances.
The proposed downsizing comes amid a challenging operating environment for the aviation sector. Rising aviation fuel costs, disruptions linked to geopolitical tensions in West Asia, restrictions on Pakistani airspace and supply-chain delays affecting aircraft deliveries have increased expenses and constrained operations.
Air India has already trimmed services on several routes in recent months and is reviewing network profitability. Industry observers say the airline’s rapid expansion, fleet modernization programme and integration of multiple carriers have added significant financial pressure during its turnaround effort.
Despite the setbacks, Tata Group remains committed to rebuilding Air India into a globally competitive carrier. However, analysts note that the focus is now shifting from aggressive growth to financial discipline as management seeks to stem losses and create a sustainable path toward profitability.
