Air India’s Strategic Pivot: Moving Aircraft Maintenance In-House Following Fatal Crash and Safety Concerns

The Tata Group-owned Air India is embarking on a major operational transformation by shifting critical aircraft maintenance services from the government-owned Air India Engineering Services Limited (AIESL) to in-house operations, with support from strategic partner Singapore Airlines. This move, accelerated by the tragic crash of Flight AI-171 in June 2025, which resulted in 241 fatalities, marks a fundamental change in how India’s flagship carrier approaches aviation safety and maintenance standards. The shift follows regulatory audits that uncovered over 50 safety lapses in Air India’s operations, highlighting systemic issues in maintenance protocols and operational procedures.

Singapore Airlines, which acquired a 25.1% stake in Air India after the Air India-Vistara merger in November 2024, will provide technical expertise to help Air India build robust internal maintenance capabilities. This is particularly important as Air India prepares for a massive fleet expansion to 570 aircraft. The transformation is not just a reaction to immediate safety concerns but also a strategic repositioning to support Air India’s growth ambitions in one of the world’s fastest-growing aviation markets, where fleet sizes and operational complexity are reaching unprecedented levels.

This article explores the sequence of events leading to this strategic shift, the technical and operational challenges revealed by recent audits and accidents, and the broader implications for India’s aviation industry and Air India’s future trajectory.

Background and Historical Context of Air India’s Transformation

Air India’s journey from a government-owned carrier to a privately-managed airline under the Tata Group is one of the most significant transformations in Indian aviation history. The Tata Group acquired Air India in 2021, marking a return to its original founders after more than fifty years of government ownership. This acquisition was part of a broader government strategy to divest from loss-making public sector enterprises and allow private management to revitalize struggling assets.

Since the acquisition, Air India has undergone comprehensive changes: fleet modernization, route expansion, service improvements, and operational restructuring. The merger with Vistara in November 2024 allowed Singapore Airlines to acquire a 25.1% stake in the enlarged Air India entity, bringing valuable international expertise to the table. This partnership is vital as Air India announced one of the largest aircraft orders in aviation history in February 2023, committing to 470 aircraft from Boeing and Airbus, valued at over $40 billion.

Historically, Air India relied on AIESL for maintenance, repair, and overhaul (MRO) services. AIESL, a government-owned subsidiary, provided maintenance to Air India and other international carriers at major Indian airports. However, as Air India modernized, concerns grew about AIESL’s service quality, efficiency, and alignment with the airline’s new objectives. Even before the recent crash, Air India’s management had identified the need for greater control over maintenance operations, though immediate operational improvements were initially prioritized.

The AI-171 Crash: A Catalyst for Change

The crash of Air India Flight AI-171 on June 12, 2025, was a defining moment that forced Air India to reconsider its maintenance outsourcing model. The Boeing 787 Dreamliner crashed shortly after takeoff from Ahmedabad, killing all but one of the 242 people on board. The sole survivor, Vishwash Kumar Ramesh, escaped with minor injuries after his section of the aircraft detached and landed on the ground floor of a medical college hostel.

Investigations revealed that the aircraft’s fuel control switches had unexpectedly moved from ‘run’ to ‘cutoff’ just seconds after takeoff, cutting off fuel to both engines. Cockpit voice recordings captured confusion among pilots about the fuel cutoff. This technical anomaly raised concerns about potential systemic issues with Boeing 787 aircraft and maintenance protocols, especially as similar incidents had been reported previously on other carriers.

The crash prompted major carriers like Etihad Airways and Singapore Airlines to inspect their Boeing 787 fleets and review maintenance procedures. The event underscored the need for robust maintenance protocols and highlighted vulnerabilities in Air India’s existing systems, particularly those managed by AIESL.

“The preliminary investigation found that the aircraft’s fuel control switches had unexpectedly moved from ‘run’ to ‘cutoff’ just seconds after takeoff, raising serious questions about maintenance protocols and system reliability.”

Comprehensive Safety Audit Reveals Systemic Issues

Following the crash, India’s Directorate General of Civil Aviation (DGCA) conducted a comprehensive safety audit that revealed 51 safety violations across Air India’s operations, the highest among Indian airlines. These were categorized into Level 1 (serious) and Level 2 (less urgent) breaches, with Level 1 issues requiring immediate corrective action.

The audit identified significant training gaps for Boeing 787 and 777 pilots, incomplete simulator training, and deficiencies in crew rostering and duty time management. For example, at least four international flights operated with insufficient cabin crew, and one flight exceeded duty time limits by over two hours. The audit also found no chief pilots assigned for the Airbus A320 and A350 fleets, and inconsistencies in pre-flight safety protocols.

Compared to other airlines, Air India’s audit results were concerning. IndiGo, with a larger fleet, recorded only 23 findings, while Air India Express and Vistara, both under the Air India Group, also had notable lapses. The audit highlighted the need for a fundamental overhaul of Air India’s safety management and maintenance oversight.

The Shift from AIESL to In-House Maintenance

AIESL, as a government-owned entity, has been the backbone of Air India’s maintenance services. However, its performance has come under scrutiny, especially as Air India pursues modernization and rapid fleet expansion. In the financial year 2022-23, AIESL handled around 450 aircraft and generated revenues of Rs. 2,029.86 crores (about $244 million), but its net profit declined by 24% year-over-year, raising questions about its capacity to invest in modernization.

Operational issues, such as delayed repairs, aircraft cleanliness, and turnaround efficiency, have been cited as ongoing concerns. As Air India prepares to induct advanced aircraft like the Boeing 787, 777X, and Airbus A350, the need for specialized maintenance expertise becomes even more pressing. The Indian MRO market, while growing, still relies on imports for over 90% of its requirements, creating cost and supply chain vulnerabilities.

Recognizing these challenges, Air India is moving to bring key maintenance functions in-house, starting with pre-flight inspections, daily checks, and minor repairs. This phased approach allows Air India to build internal capabilities while continuing to rely on AIESL for more complex tasks during the transition. The goal is to achieve greater control over maintenance quality, scheduling, and costs, critical factors as the airline expands its fleet and operations.

Singapore Airlines’ Role and Technical Expertise

Singapore Airlines’ involvement is central to Air India’s maintenance transformation. With a 25.1% equity stake following the Vistara merger, Singapore Airlines has a vested interest in Air India’s operational success. Its subsidiary, SIA Engineering Company (SIAEC), is Asia’s leading MRO provider, servicing more than 60 airlines and maintaining advanced aircraft like the Boeing 787 and Airbus A350.

SIAEC’s expertise is particularly valuable for Air India’s diverse and expanding fleet. Their experience maintaining similar aircraft types, combined with advanced diagnostic and predictive maintenance technologies, positions Air India to rapidly upgrade its internal capabilities. The partnership also leverages historical ties, Air India assisted Singapore Airlines in the 1970s, and now the roles are reversed.

Beyond technical support, Singapore Airlines brings best practices in safety culture, regulatory compliance, and operational excellence. This collaboration is expected to facilitate knowledge transfer, joint procurement, and shared facilities, resulting in cost efficiencies and improved service standards for Air India.

“Singapore Airlines’ technical expertise and global best practices in maintenance are expected to accelerate Air India’s progress toward operational excellence and safety culture transformation.”

Financial and Strategic Implications

Transitioning to in-house maintenance requires significant upfront investments in facilities, equipment, technology, and workforce training. Modern maintenance facilities, especially for widebody aircraft, involve substantial capital expenditure. Air India’s shareholders, Tata Sons and Singapore Airlines, have committed over $1.15 billion in the 2024-25 financial year to support these initiatives.

While the initial costs are high, long-term benefits include improved cost control, operational efficiency, and the potential to generate revenue by offering MRO services to third parties. Airlines typically achieve 15-25% cost savings by internalizing maintenance, primarily through reduced markups and better scheduling. For Air India, with annual maintenance costs estimated in the hundreds of millions, these savings are substantial.

Developing internal maintenance capabilities also supports India’s goal of building a robust domestic MRO industry, reducing reliance on foreign providers and strengthening supply chain resilience. This is especially important as the Indian aviation market is projected to quadruple in fleet size over the next two decades, with demand for 2,835 new aircraft by 2043 according to Boeing’s Commercial Market Outlook.

Conclusion

Air India’s decision to transition aircraft maintenance from AIESL to in-house operations, supported by Singapore Airlines, marks a pivotal moment in the airline’s transformation. The move addresses immediate safety concerns highlighted by the AI-171 crash and DGCA audits, while positioning Air India for sustainable growth and operational excellence in a rapidly evolving market.

By investing in internal capabilities, leveraging global best practices, and building a culture of safety and compliance, Air India aims to restore its reputation and compete effectively with both domestic and international carriers. The success of this transition will depend on effective execution, ongoing investment, and a continued commitment to safety and quality as the airline expands its fleet and network.

FAQ

Q: Why is Air India moving maintenance in-house?
A: The move is driven by safety concerns highlighted after the AI-171 crash and regulatory audits, as well as the need for better control over maintenance quality, costs, and operational efficiency amid fleet expansion.

Q: What role does Singapore Airlines play in this transformation?
A: Singapore Airlines, through its subsidiary SIA Engineering Company, provides technical expertise, best practices, and strategic support to help Air India develop robust internal maintenance capabilities.

Q: Will AIESL continue to provide any services to Air India?
A: During the transition, AIESL will likely continue to handle more complex maintenance tasks while Air India builds up its internal capabilities for routine checks and repairs.

Q: How does this shift affect India’s aviation sector?
A: The move supports the development of a stronger domestic MRO industry, reduces reliance on imports, and sets a precedent for other Indian carriers seeking operational excellence and safety improvements.

Sources

• The Economic Times
• Bloomberg
• AIESL Official Site
• SIA Engineering Company
• Boeing Commercial Market Outlook