NEW DELHI, Feb. 6 -- Four years into its Tata-led turnaround, Air India's $400 million programme to modernize older aircraft is running up to two years behind schedule. The delay has pushed back the carrier's effort to refresh its fleet, expand internationally and rebuild its brand, even as management says the project remains on budget and the retrofit designs are mostly complete.

Supply-chain bottlenecks, particularly around aircraft seats and their certification, have slowed the rollout of upgraded wide-body cabins, including business and first class on Boeing 787 and 777 aircraft, according to chief executive Campbell Wilson. Air India now expects the first retrofitted planes to join the fleet by March 2026.

"From a cost perspective,...