How a state-owned airline became the backbone of India's regional connectivity strategy
In short: Originally a low-cost feeder for Indian Airlines, Alliance Air has evolved into a specialized state-run carrier. While major airlines focus on high-traffic corridors, this unique operator connects smaller, underserved airports across the nation, even pioneering the use of domestically manufactured aircraft to reach remote regions in the Himalayas.
Established in April 1996, Alliance Air began as a subsidiary of Indian Airlines, initially relying on a fleet of Boeing 737s to provide regional feeder services. Its trajectory shifted significantly following the 2011 merger between Indian Airlines and Air India, which saw the carrier rebranded as Air India Regional. However, when the government sold Air India to Tata Sons in 2021, Alliance Air remained under state control. It was transferred to AI Assets Holding Limited, a special purpose vehicle created to manage the government's remaining aviation liabilities, and eventually reclaimed its original identity in April 2022.
The airline serves as a crucial instrument for the government's UDAN scheme, a regional connectivity initiative launched in 2016 designed to link unserved or under-served airports. To support this mission, the carrier has diversified its fleet beyond standard jets. In a milestone for domestic manufacturing, the airline became the first commercial operator to utilize the Indian-made Dornier 228, an aircraft previously reserved for the Indian Armed Forces. By 2022, the company also expanded its capabilities by acquiring ATR 42 aircraft, specifically chosen for their ability to navigate smaller airfields in the challenging terrain of the Himalayan region.
Despite its public-service mandate, the airline has navigated complex financial and operational waters. It achieved its first recorded operating profit during the 2019–20 fiscal year, reporting ₹650.9 million. While the company has explored international routes—notably a service between Chennai and Jaffna that operated intermittently between 2019 and 2024—its primary focus remains domestic. Today, the airline operates 57 destinations from major hubs including Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai, maintaining a fleet that includes various ATR models and the Dornier 228 to ensure connectivity across India's diverse geography.
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- Summary by Intellect · source: Alliance Air (India)
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