The board of Air India on Thursday reviewed several cost-cutting measures, including possible furloughs, as the loss-making carrier continues to face mounting challenges, largely linked to the conflict in West Asia, as reported by PTI.
The meeting was held at the airline’s headquarters in Gurugram.
“The meeting started at around 11.30 am and went on for over three hours. Cost-saving measures were among the topics discussed at the meeting,” according to PTI citing sources.
The measures could include furloughs and deferred payment of bonuses, they added.
Bonuses, which are performance-linked, are part of CTC (Cost To Company) at Air India.
Generally, furlough refers to companies sending staff on unpaid leave during a tough financial situation.
Meanwhile, Air India CEO and MD Campbell Wilson will be addressing a town hall on Friday.
Earlier, sources had said the airline’s financials for 2025-26, cost-saving measures and selection of a new CEO were expected to be discussed at the meeting.
Wilson will be stepping down later this year.
Restrictions on airspace and rising jet fuel costs linked to the West Asia conflict are putting additional pressure on Air India as it pursues a major transformation plan. The airline’s operating expenses have increased sharply in recent months.
In response, the carrier is considering a range of cost-cutting measures.
The airline’s board is led by N. Chandrasekaran, chairman of Tata Sons. Other board members include Campbell Wilson, Goh Choon Phong, Sanjiv Mehta, Alice Vaidyan, P. R. Ramesh and P. B. Balaji.
The Air India Group, comprising Air India and Air India Express, is expected to have posted losses exceeding ₹22,000 crore in the financial year ending March 2026.
“Jet fuel price situation remains extremely challenging”
On May 1, Wilson told staff that the airspace and jet fuel price situation remains extremely challenging. “… 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,” he had said in a message.
While cuts in international flights happened in April and are continuing in May, Wilson had also said the situation leaves the airline with no choice “but to further trim schedules for June and July”.
“We very much regret the disruption to our customers’ plans and our crew’s rosters, and hope that the Middle East situation settles — and the Strait of Hormuz opens — soon so that we can get back to a more normal state,” he had said.
According to him, the profitability of domestic flights has also been significantly affected, but to a lower degree due to the government’s limitation of the domestic fuel price rise to 25 per cent.
“To partially compensate for the huge spike in costs, we have increased airfares and imposed fuel surcharges but, understandably, these higher airfares impact customer demand, so we can only raise fares so far before people decide to stay home,” he had said.
On April 26, Air India, IndiGo, and SpiceJet told the government that the country’s airline industry is under extreme stress and on the verge of “stopping operations”, as they sought revision in jet fuel pricing and financial support.
In the monthly revision of aviation turbine fuel (ATF) prices on May 1, jet fuel prices for international flights were hiked by a little over 5 per cent.
It is not just Indian carriers; globally, the airlines’ industry is facing challenging times due to the West Asia turmoil, and many of the players have gone for cost-cutting measures, while US ultra low-cost operator Spirit Airlines has shuttered operations.
Global airlines’ grouping IATA’s chief Willie Walsh on April 29, said there could be shortages of jet fuel in Asia and Europe in the coming months, and that the extraordinarily high fuel costs are increasingly being reflected in ticket prices.
