Tata Group may invest $75-100 mn in Air India Express in next 5 years to expand international operations

Air India Express

The Tata Group is looking to significantly expand the international operations of Air India Express in the next five years and will look to infuse $75-100 million in the airline as part of its expansion plans, multiple sources aware of the matter told Moneycontrol.

"The investment will mostly be to add more aircraft in the near future to Air India Express' current fleet of 24 Boeing 737-800s," one of the sources mentioned above, said.

As part of the proposed investment, the new promoters of Air India will look to invest around $15-20 million annually in Air India Express for the next five years, the source said.

Air India Express is looking at around 30 countries including, Cambodia, China, Indonesia, the Philippines, Turkey, and Vietnam to expand its international operations in the next few years, the airline's chief of commercial operations Tara Naidu said last week.

Naidu had added that Air India Express will look to offer flights from Tier-II and Tier-III cities to international destinations.

She added that the low-cost carrier intends to rapidly grow its network under the new owner Tata Group, maintaining its strategy of offering inter-regional routes within a six-hour stage length.

Air India Express currently serves 19 destinations in India and 14 international points, with aircraft bases at Cochin, Delhi, Kozhikode, Mangalore, Mumbai, Thiruvananthapuram and Tiruchchirappalli.

"The airline is looking to start flights from Gorakhpur to Sharjah, Muscat and Riyadh very soon," a source close to the airline said.

Air India Express is one of four airlines under the Tata Brand. While full-service Air India and Vistara are expected to be merged into one airline, AI Express is speculated to merge with AirAsia India to form the Tata Group's consolidated budget entity.

In April, Air India sought approval from the Competition Commission of India (CCI) to acquire AirAsia India, in which the Tatas have a majority stake of 83.67 percent.

While there have been no formal announcements, the merger – if and when that happens – is speculated to support AI Express in furthering its future ambitions for regional expansion.