Addressing staff in a town hall on Friday, Wilson forecast a softening in revenue this fiscal year, a reversal from Air India’s 40% compound annual growth rate since the Tata Group assumed control in 2022, people told ET.
The carrier is navigating a convergence of external shocks: the prolonged closure of Pakistan’s airspace, the Iran war, a weaker rupee, and jet fuel prices trading at 2.5 to 3 times previous levels.
ET BureauAirline to defer salary hikes at least by a quarter, freeze discretionary spend
The move to fiscal austerity marks a critical inflection point for India’s former flag carrier. Having committed to multi-billion-dollar orders for 470 planes and a total cabin overhaul to challenge Gulf rivals, Air India is now facing a liquidity test.
He said the management must execute a high-stakes balancing act: stripping out “wastage and leakages” to protect the balance sheet while ensuring that cost-cutting doesn’t derail a fragile improvement in service standards and operational reliability.
Wilson’s directive mandates an immediate freeze on discretionary spending and a requirement to renegotiate vendor rates. The airline will defer annual salary increments by at least a quarter to preserve cash, though it will honour variable pay for the previous fiscal.
Chief human resources officer Ravindra Kumar GP confirmed the company isn’t anticipating layoffs as he sought to stabilise internal sentiment.CFO Sanjay Sharma said while FY25 benefited from rapid fleet deployment, FY26 saw a more volatile demand environment. In response, Air India is aggressively optimising its network, eliminating route overlaps with low-cost unit Air India Express, and expanding its Southeast Asia feeder network to seven destinations from two.
Despite the fiscal tightening, the airline reported underlying operational gains. Domestic on-time performance rose to 76% in FY26, up from 73% a year earlier. More critically, the carrier’s net promoter score (NPS)-a measure of customer loyalty-reached 30 in March 2026, a recovery from the negative 19 recorded in 2023. Air India has completed the retrofit of its legacy narrowbody fleet and commenced work on widebody aircraft, with the first refurbished long-haul jet already back in service.
