Air India is planning to convert some of its passenger aircraft into dedicated freighters as part of a broader strategy to expand its cargo business and strengthen revenue generation under its ongoing transformation programme.
The initiative is among the strategies outlined by the airline’s new Chief Executive Officer, Tewolde Gebremariam, according to Singapore Airlines in its investor presentation released on Thursday. Singapore Airlines holds a 25.1% stake in Air India and accounts for its share of the airline’s financial performance in its consolidated results.
Alongside cargo expansion, Air India is targeting higher sales from overseas markets to mitigate the impact of rupee depreciation. The airline also plans to rebalance its services between Mumbai and Delhi and establish Bengaluru as its third hub to reduce the operational impact of the closure of Pakistani airspace.
Air India is also looking to strengthen commercial partnerships with Singapore Airlines and other carriers to generate additional revenue. In October, the two airlines introduced joint fares across various routes. Singapore Airlines said average daily bookings on flights operated by both carriers have increased following the initiative.
Financial Performance Shows Signs of Improvement
Air India has been under financial pressure, reporting a net loss of more than ₹22,000 crore in FY2025-26, primarily due to rupee depreciation and higher fuel consumption resulting from airspace closures. The substantial loss also triggered discussions in Singapore’s Parliament, reflecting investor concerns over Singapore Airlines’ investment in the Indian carrier.
However, Air India’s financial performance showed signs of improvement during the first half of FY2026-27, with its losses narrowing by approximately ₹2,000 crore year-on-year. The reduction in losses also helped Singapore Airlines offset part of the decline in its consolidated net profit.
Focus on Long-Term Transformation
In its latest results statement, Singapore Airlines acknowledged that Air India has made tangible progress in its multi-year transformation programme, particularly in improving customer experience and operational performance.
The airline has also witnessed improving customer sentiment, reflected in the positive trajectory of its Net Promoter Score, alongside external recognition through performance awards.
Singapore Airlines and Tata Sons reiterated their commitment to supporting Air India’s journey towards profitable growth. Their priorities include strengthening structural cost efficiencies, unlocking greater synergies between Air India and Air India Express, refining the airline’s commercial strategy to address external challenges, and enhancing its overall customer proposition.
The proposed conversion of passenger aircraft into dedicated freighters represents another potential avenue for Air India to diversify its revenue streams and tap into the growing air cargo market as it works towards achieving sustainable profitability.