The Air India board met on Thursday at the airline's headquarters in Gurugram for over three hours to review multiple cost-containment steps as operating pressures intensify. According to PTI, the meeting, which started at around 11:30 am, focused on cost-saving measures including possible furloughs for non-technical employees, cuts in performance-linked bonuses, and salary reductions for senior executives at the vice-president level and above. The airline is also considering reducing flight capacity by more than 20 per cent over the next three months if conditions fail to improve. As per PTI, the measures could include furloughs and deferred payment of bonuses, with bonuses being performance-linked and part of CTC (Cost To Company) at Air India. The board is now scheduled to meet again on May 7 to continue these discussions, with the airline facing significant operational challenges from the West Asia conflict.
On May 1, Air India CEO and MD Campbell Wilson told staff that the airspace and jet fuel price situation remains extremely challenging. As reported by PTI, Wilson stated that "massive rise in jet fuel prices which, together with airspace closures and longer flying routes, has caused many of our international flights to become unprofitable to operate." While cuts in international flights happened in April and are continuing in May, Wilson indicated that the situation leaves the airline with no choice "but to further trim schedules for June and July." He expressed regret for the disruption to customers' plans and crew rosters, hoping that the Middle East situation settles and the Strait of Hormuz opens to return to a more normal state. Wilson is now scheduled to address staff in a townhall meeting to discuss the challenging operational environment and the airline's response strategies.
During a townhall meeting on Friday, Air India Chief Human Resources Officer Ravindra Kumar GP assured employees that job cuts were not expected despite mounting financial pressures linked to the Middle East conflict. As reported by The Times of India, Kumar told employees "We don't anticipate layoffs," providing relief to staff amid the difficult operating environment. However, the management indicated that annual salary increments would be deferred by at least one quarter due to the uncertain economic situation. Kumar also confirmed that the airline would proceed with variable pay for the last financial year and continue with planned promotions, demonstrating the company's commitment to maintaining employee benefits while implementing cost-control measures. The Town Hall follows an AI board meeting on Thursday during which cost-cutting measures were discussed as the airline has lost over ₹22,000 crore last fiscal due to multiple factors.
Addressing the townhall meeting, outgoing CEO Campbell Wilson stressed the need for comprehensive cost reduction measures, urging employees to suspend discretionary spending, renegotiate rates where feasible, and defer non-critical expenditures. As reported by The Times of India, Wilson emphasized "There must be a laser sharp focus on eliminating wastage and leakages." The airline has been battling a series of black swan events for over a year, including closure of Pakistan airspace since Operation Sindoor, the tragic Ahmedabad AI 171 crash, the US-Iran war that has led to further lengthening of western routes, and a sharp hike in jet fuel prices. Wilson noted that while AI wasn't expecting a profit last fiscal, the actual losses were more than what it had anticipated, highlighting the severity of the operational challenges facing the airline.
