In a significant milestone for the Tata Group’s aviation turnaround, Air India Express is projected to post its first operating profit since its privatization in 2022.
According to internal town hall updates shared on February 4–5, 2026, the budget carrier is on track to enter the black during the second half of FY26 (October 2025 – March 2026). This performance makes the low-cost arm a rare “bright spot” within the wider Air India Group, which is currently grappling with high costs due to Pakistan’s airspace restrictions and fleet delivery delays
1. Financial Turnaround: From Losses to Operating Profit
The projected profit follows a challenging period of integration and aggressive scaling.
| Metric | FY25 (Actual) | H2 FY26 (Projected) | Status |
| Financial Result | ₹5,678 Cr Net Loss | Operating Profit | Recovery |
| Market Share | ~7-8% | ~12-13% | Growth |
| Fleet Size | ~80-90 | 110+ | Expansion |
- Operating vs. Net Profit: While the airline expects an operating profit for the second half of the year, analysts suggest it may still close the full fiscal year (FY26) with a net loss due to heavy integration costs and interest payments.
- The “Value Carrier” Pivot: Management has repositioned the airline as a “Value Carrier”—bridging the gap between low-cost and full-service—to capture a higher yield from premium budget travelers.
2. The $70 Million Cabin Retrofit Plan
To standardize the customer experience across its diverse fleet, Air India Express has launched a major $70 million (₹585 crore) refurbishment program.
- Standardization: The airline is retrofitting 50 Boeing 737 MAX “white tail” aircraft (originally built for other carriers) to align their cabin configurations.
- All-Economy Focus: Over 40 aircraft currently featuring business class seats will be converted to a single-class (all-economy) layout by April 2026 to maximize capacity.
- Legacy Upgrades: 26 older Boeing 737 NGs will also undergo interior upgrades to match the newer “vibrant” branding and seat comfort standards.
3. Network and Fleet Expansion (2026–2031)
Following the merger with AIX Connect (formerly AirAsia India) in late 2024, the airline has emerged as a powerhouse in the domestic market.
- Current Standing: It is now the second-largest airline in India by domestic routes (110) and domestic stations (45), recently surpassing its parent, Air India, in these specific metrics.
- Route Mix: The airline maintains an almost even split between international (54%) and domestic (46%) capacity, focusing heavily on high-yield Gulf (GCC) routes.
- Vision 2031: The airline aims to triple its fleet to 300 aircraft and capture a 25% total market share by the end of the decade.
4. Challenges: The Group Shadow
Despite the positive outlook for the Express arm, the broader Air India Group continues to face headwinds.
- Airspace Costs: Parent company Air India is facing an estimated ₹4,000 crore annual hit due to the closure of Pakistan’s airspace, which forces longer routes for North American and European flights.
- Group Losses: While Air India Express targets operating profit, the combined group loss for FY26 is projected to exceed ₹15,000 crore, highlighting the scale of the remaining full-service turnaround.
Conclusion: A Strategic Success
The turn to operating profitability in 2026 validates the Tata Group’s decision to consolidate its low-cost operations. By focusing on “unit economics” and aggressive capacity growth, Air India Express is successfully building a scalable model that can challenge IndiGo’s dominance. For the airline, 2026 is no longer about survival, but about proving that a “value” model can be sustainable in the world’s fastest-growing aviation market.
