Air India CEO to cut high bills of A350 fleet

Air India’s new Chief Executive Officer, Tewolde Gebremariam, is exploring ways to reduce the cost of maintaining the airline’s Airbus A350 fleet as he looks to curb expenses across the loss-making carrier, Bloomberg reported, citing people familiar with the matter.Air India currently operates six Airbus A350-900 aircraft, powered by Rolls-Royce Holdings’ Trent XWB engines, on key routes to the US and Europe. In 2023, the airline had placed an order for 80 Trent XWB engines, with options for another 20, in what was a record order for the engine programme.Also read: Airspace curbs impact on Air India worse than last year: OfficialTewolde, who took charge of the airline last month, has raised concerns about the higher-than-expected costs of operating and maintaining the engines, people familiar with the discussions told Bloomberg, speaking on the condition of anonymity.The airline has held initial discussions with service providers over the expenses. The maintenance costs have turned out to be higher than anticipated when the agreements were signed, an issue the airline has also flagged with the companies, the people said.Air India uses Airbus Flight Hour Services and has signed up for Rolls-Royce’s TotalCare maintenance programme.The cost review comes as Tewolde, the former chief executive of Ethiopian Airlines Group, seeks to improve Tata-owned carriers' financial performance. The airline reported a record annual loss of more than 220 billion rupees ($2.3 billion) in the last fiscal year and is seeking 100 billion rupees in funding from its owners, Tata Sons and Singapore Airlines. Both shareholders are facing scrutiny over the prospect of extending further financial support.Tewolde is also looking to improve the utilisation of Air India’s cargo operations. The airline uses only about 35% of its cargo capacity on average, people familiar with the matter said earlier in September.Separately, he has asked employees to work on a plan to reduce maintenance-related problems, particularly given the relatively young age of the airline’s fleet.Cutting losses is a key priority for majority owner Tata Sons, which is facing a power struggle over Chairman N Chandrasekaran’s tenure as well as regulatory pressure to list. Tata Sons, the holding company of the conglomerate with businesses spanning coffee to automobiles, has directed Air India to slow its expansion and focus on consolidating its operations.Also read: Air India's consolidated loss widens to Rs 22,238 crore in FY26Air India weighs merging Air India Express to streamline operationsCEO Tewolde Gebremariam is also considering folding budget carrier Air India Express into the main airline group as part of a broader cost-cutting drive following record losses, Bloomberg reported on September 18, citing people familiar with the matter.The proposal, which is at an early stage, would bring the two airlines under a single group structure while retaining the Air India Express brand.Tewolde had questioned the need to operate two airlines with separate operating permits, arguing that consolidation could reduce regulatory requirements and eliminate duplication across management, engineering and administrative functions. The plan would require approval from Air India's supervisory board.The proposed restructuring would add to a series of changes in Air India's corporate structure.