Air India plots rapid buildout of budget unit, taking on Indigo

Air India Ltd. mapped out an aggressive expansion plan for its low-cost unit, targeting a fleet of 170 aircraft over the next five years as the airline takes on budget leader IndiGo.

Air India Express is in the “final stages” of absorbing AirAsia India into its operations, according to a statement from Air India Chief Executive Officer Campbell Wilson on Wednesday. The company unveiled a revamped orange, turquoise and gray livery for the unit, which will retain the Air India Express brand.

The move marks the latest step in Air India’s renewal under the ownership of Tata Group, India’s largest conglomerate, which founded the airline decades ago and retook control of the flagship carrier in 2022. The merger and new aircraft will roughly triple the Air India Express fleet from its current levels.

Air India Express will add 50 of the 170 narrowbody aircraft over the next 15 months, Managing Director Aloke Singh said at an event in Mumbai. The airline will fly domestic and short-haul international routes, Singh said, pitting it directly against Indigo, a dominant force in India with about 63% of the domestic market. 

The new planes are a part of 470-jet deal inked by Air India in February. Air India Express aims to double its domestic and international market shares from about 8% and 12% respectively as it gears up services to the Middle East, Southeast Asia and South Asia, Singh said. 

Air India Express, which was established in 2005, currently has a fleet of 56 aircraft, roughly split between Airbus SE A320 and Boeing Co. 737 jets.