Cost-saving steps amid 'tough times'; layoffs not anticipated, Air India tells staff

Air India on Friday urged staff to suspend discretionary spending and defer non-critical expenditures while annual increments will be deferred by at least one quarter in these tough times and assured them that layoffs are not anticipated, according to sources.

Air India on Friday urged staff to suspend discretionary spending and defer non-critical expenditures while annual increments will be deferred by at least one quarter in these ''tough times'' and assured them that layoffs are not anticipated, according to sources. Air India Chief Executive Officer & Managing Director (CEO & MD) Campbell Wilson, along with Chief Financial Officer (CFO) Sanjay Sharma and Chief Human Resources Officer (CHRO) Ravindra Kumar GP, addressed the employees during a townhall on Friday where the emphasis on the need to keep a close watch on costs. With higher jet fuel prices due to the West Asia conflict and airspace curbs, the loss-making airline's expenses have spiralled in recent times and against this backdrop, Sharma also told staffers that FY26 has seen a softening in revenue amid heightened external uncertainties. Calling for a relentless focus on costs in these tough times, Wilson urged employees to suspend discretionary spending, renegotiate rates where feasible, and defer non-critical expenditures. ''There must be a laser-sharp focus on eliminating wastage and leakages,'' he said. CHRO Ravindra Kumar told staff that the airline will proceed with variable pay for the last financial year and continue with planned promotions while noting that annual increments will be deferred by at least one quarter. ''We don't anticipate layoffs,'' he said. At the airline's board meeting on Thursday, various cost-saving steps, including likely furloughs, were discussed. The Tata Group-owned airline has around 24,000 employees. Generally, furlough refers to sending staff on unpaid leaves by companies during a tough financial situation. During the townhall, CFO Sanjay Sharma said that while strong revenue growth and fleet expansion drove financial momentum through FY25, FY26 has seen a softening in revenue amid heightened external uncertainties. Air India has seen around 40 per cent CAGR (Compounded Annual Growth Rate) in revenue between 2022 and 2025, he added. The airline was acquired by the Tata Group from the government in January 2022. The Air India CEO mentioned the external challenges being facing the aviation industry as a whole, including the continued closure of Pakistan airspace that is expected to persist for the foreseeable future and geopolitical conflicts leading to disruptions and airspace closures across West Asia. Wilson, who is set to step down later this year, also flagged a sharp depreciation of the rupee and a 2.5-3 times increase in jet fuel prices, and added that these factors have adversely affected travel sentiment and consumer confidence, as per the sources. The Air India Group -- Air India and Air India Express -- is projected to have incurred more than Rs 22,000 crore loss in the financial year ended March 2026. At the townhall, Wilson also highlighted various initiatives, including completion of the retrofit of its legacy narrow-body aircraft and rapid network optimisation to redeploy capacity more efficiently.