Air India has assured its employees that there would be no layoffs despite mounting losses and on-going external headwinds such as higher jet fuel prices and airspace closures. In a town hall held on Friday, the top level management, led by MD & CEO Campbell Wilson, indicated that annual increments will be deferred by at least one quarter in light of the uncertain economic environment.
According to sources, Wilson asked the employees to suspend discretionary spending and defer non-critical expenditures to cut down on costs. He also spoke out about external headwinds impacting the airline industry, including Air India.
“We need to focus relentlessly on our costs in these tough times…There must be a laser-sharp focus on eliminating wastage and leakages,” Wilson told employees. He also asked them to suspend discretionary spending, renegotiate rates where feasible and defer non-critical expenditures.
The town hall was also attended by Air India Chief Financial Officer Sanjay Sharma and Chief Human Resources Officer Ravindra Kumar GP.
Kumar said Air India will proceed with variable pay for the last financial year and continue with planned promotions while annual increments will be deferred by at least one quarter in light of the uncertain economic environment. "We don't anticipate layoffs," he said. Air India employee count stands at about 24,000.
Sources said that Wilson also highlighted several global and regional challenges affecting the airline industry, including the continued closure of Pakistan’s airspace since May last year, geopolitical tensions across West Asia, the depreciation of the Indian rupee and a steep rise in aviation turbine fuel (ATF) prices.
Till the end of last month, ATF prices had more than doubled to $180-190/barrel since the war broke out in West Asia on February 28. The government in April limited the hike to Rs 15 per litre for domestic operations. However, for international operations, ATF prices have risen twice in two months. ATF prices generally account for about 30-40% of an airline’s operating cost. Following the April hike, this percentage band increased to 55-60%, as per the Federation of Indian Airlines (FIA).
Owing to the mentioned challenges, Air India, which was taken over by the Tata Group in January 2022, is expected to post losses exceeding Rs 22,000 crore for FY26, its highest on record. CFO Sanjay Sharma said that the airline witnessed strong financial momentum over the past few years with revenue growing at an approximate compounded annual growth rate (CAGR) of 40% between 2022 and 2025. However, he stated that FY26 has seen a softening in revenue amid heightened global uncertainties.
The town hall by Air India's top management was organised a day after the airline’s board of directors held a meeting on Thursday at its headquarters in Gurugram, Haryana.
