Air India’s board on Thursday reviewed several cost-cutting measures, including possible furloughs, as the loss-making carrier continues to face mounting challenges, largely linked to conflict in West Asia, PTI reported.
The meeting was held at the airline’s headquarters in Gurugram.
“The meeting started around 11.30 am and lasted for over three hours. Among the topics discussed in the meeting were austerity measures,” PTI said, citing sources.
Read also | Air India to cut 100 daily flights due to rise in fuel costs; selection of hit routes
The measures could include vacations and deferred bonus payments, they added.
Performance based bonuses are part of Air India’s CTC (Cost To Company).
In general, the leave applies to companies that send employees on unpaid leave in a difficult financial situation.
Meanwhile, Air India CEO and MD Campbell Wilson will address the Town Hall on Friday.
Earlier, sources said the meeting was to discuss the airline’s financials for 2025-26, cost-saving measures and the selection of a new CEO.
Wilson will step down later this year.
Airspace restrictions and rising jet fuel prices linked to conflict in West Asia are putting further pressure on Air India as it pursues a major transformation plan. The airline’s operating costs have risen sharply in recent months.
Read also | Air India to cut 100 daily flights due to rise in fuel costs; selection of hit routes
In response, the carrier is considering a number of cost-cutting measures.
The airline’s board is headed by N. Chandrasekaran, chairman of Tata Sons. Other board members include Campbell Wilson, Goh Choon Phong, Sanjiv Mehta, Alice Vaidyan, PR Ramesh and PB Balaji.
The Air India group, comprising Air India and Air India Express, is expected to post losses in excess of ₹22,000 crore in the financial year ending March 2026.
“The aviation fuel price situation remains extremely challenging”
On May 1, Wilson told staff that the airspace and jet fuel price situation remains extremely challenging. “… a massive increase in jet fuel prices which, together with airspace closures and longer flight routes, have made it unprofitable to operate many of our international flights,” he said in the report.
While the cuts to international flights took place in April and continue into May, Wilson also said the situation leaves the airline with no choice but to “further reduce the flight schedule for June and July”.
“We deeply regret the disruption to our customers’ plans and our crew’s schedules, and hope that the situation in the Middle East will settle down – and the Strait of Hormuz will open – soon so we can return to a more normal state,” he said.
According to him, the profitability of domestic flights is also significantly affected, but to a lesser extent due to the government limiting the growth of domestic fuel prices to 25 percent.
“To partially offset the huge increase in costs, we have increased airfares and imposed fuel surcharges, but these higher airfares understandably affect customer demand, so we can only raise prices so far before people choose to stay at home,” he said.
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On April 26, Air India, IndiGo and SpiceJet told the government that the country’s aviation industry was under extreme pressure and on the verge of “stopping operations” as they demanded a review of jet fuel prices and financial support.
In the monthly revision of aviation turbine fuel (ATF) prices dated May 1, jet fuel prices for international flights increased by just over 5 percent.
It’s not just about Indian carriers; Globally, the airline industry is facing challenging times due to unrest in West Asia, with many players opting for cost-cutting measures, while US ultra-low-cost operator Spirit Airlines closed operations.
IATA’s head of global airlines Willie Walsh said on April 29 that there could be shortages of jet fuel in Asia and Europe in the coming months and that extraordinarily high fuel costs are increasingly being reflected in ticket prices.
