Air India will defer annual staff increases by at least a quarter as part of broader cost rationalization measures driven by an uncertain economic environment, top executives told staff at a town hall on Friday.
Ravindra Kumar JP, chief human resources officer, said the airline does not expect to lay off workers.
The announcement came during a meeting addressed by Air India CEO Campbell Wilson, along with Kumar and CFO Sanjay Sharma.
“We will continue to pay the performance-related variable pay for last year, and that has been decided – we will defer the increase for this year. We will consider as the environment evolves over the course of the year whether and when we can pay it. We have budgeted to pay it when the environment improves, but we will hold it for now… We do not anticipate any need to cut expenses,” Wilson said.
Wilson highlighted external challenges affecting the aviation sector, including the continued closure of Pakistani airspace, geopolitical conflicts that have led to disruptions and closures of airspace across West Asia, the sharp devaluation of the rupee, and a three-fold increase in jet fuel prices.
“… We were not targeting profit this year, we were targeting a certain amount of loss. We lost more than we aimed to lose, if you get what I’m saying, but the important point is that we achieved 56% of what we set out to do on the financial front,” he said.
Wilson urged employees to suspend discretionary spending, renegotiate rates where possible, and postpone non-critical expenses.
“We need to focus relentlessly on our costs in these difficult times,” the CEO said. “There must be a sharp focus on eliminating wastage and leakages.”
Detailing the airline’s recovery efforts, Wilson said: “There are many things that we have been doing and will continue to do to build our revenues on the cost side of the equation. It’s increasing our business volume, so we’re spreading our fixed costs across a higher capacity base. It’s adopting more technology so that we’re not just doing things manually, but we’re able to do things more efficiently. It’s getting new, more fuel-efficient aircraft to replace older aircraft.”
Speaking about route adjustments due to the West Asia crisis, Wilson said: “…With the airspace restrictions, some of the routes we used to operate are no longer profitable or actually loss-making making those routes we need to pull back. Sometimes, frequency will be withdrawn, sometimes routes may be completely suspended. We will come back when conditions change, but we need to be agile to change our network.”
While strong revenue growth and fleet expansion drove financial momentum through FY2025, FY2026 saw a decline in revenues amid rising external uncertainties, Sharma said.
