Air India is looking to expand its cargo operations by converting passenger aircraft into dedicated freighters as part of its revenue-growth strategy, according to Singapore Airlines’ latest investor presentation. The initiative is among the plans outlined by newly appointed CEO Tewolde Gebremariam.
Singapore Airlines, which holds a 25.1% stake in Air India, said the airline’s cargo business has gained momentum in recent months through improved capacity utilisation and higher yields. One-stop services to the US and Canada, introduced due to airspace restrictions, have also enabled Air India to transport larger cargo volumes.
Cargo Growth Strategy
Air India is also aiming to increase revenue from international markets to offset the impact of rupee depreciation. Its plans include adjusting services between Mumbai and Delhi and establishing Bengaluru as its third hub to reduce the impact of Pakistan airspace restrictions.
The airline is further strengthening commercial partnerships with Singapore Airlines and other carriers to boost revenue. In October, both airlines introduced common fares across several routes, resulting in an increase in average daily bookings on jointly operated flights.
Financial Challenges
Singapore Airlines has faced investor scrutiny over its investment in Air India, which reported a net loss of more than ₹22,000 crore in FY26. Currency depreciation and higher fuel consumption due to airspace closures contributed to the significant loss, which also triggered discussions in Singapore’s Parliament.
Transformation Progress
Singapore Airlines reported a 44% year-on-year decline in its net profit in H1 FY27. Lower taxes and a reduced share of Air India’s reported losses helped cushion the impact.
However, the airline clarified that the lower loss contribution was partly due to the reversal of provisions made in previous years, rather than a 16% reduction in Air India’s actual losses.
Singapore Airlines also acknowledged progress in Air India’s multi-year transformation, citing improvements in customer experience, operational performance and customer sentiment.
Both Singapore Airlines and Tata Sons remain committed to supporting Air India’s turnaround, focusing on cost efficiencies, stronger synergies between Air India and Air India Express, improved commercial strategies and enhanced customer experience.
