'Expect A Very Very Difficult Year Ahead,' Air India CEO Tells Employees As Airline Decides To Defer Increment, Potential Furloughs

Mumbai: Air India is set to implement several cost-cutting measures, such as potential furloughs and the deferral of bonuses, as the airline is said to have recorded a whopping loss of Rs 22,000 crore in the financial year 2026. The flagship carrier, owned by the Tata Group, is grappling with soaring jet fuel prices and operational disruptions caused by ongoing geopolitical volatility in West Asia, while the shadow of the disastrous Ahmedabad crash still hovers over the airline.

Board meets in Gurugram to discuss stemming financial haemorrhage

The board of Air India met at the airline’s headquarters in Gurugram on Thursday and Friday to discuss cost-cutting measures amid the rising jet fuel prices, airspace closures in Pakistan and the West Asia war. At the meeting, which continued for over three hours, the board outlined several drastic measures to stem the financial haemorrhage, including deferment of increments, bonus delays, sending employees on unpaid leave and slashing down all non-essential expenditure as well as discretionary spending.

Following the board meeting, Air India CEO Campbell Wilson informed the employees about the deferment of increment for this year, and the airline will pay it when the environment gets better. He stated that the airline has achieved 56% on the financial front and 76.4% of the overall annual target.

Wilson calls situation a "black swan event" for aviation industry

Describing it as a black swan event, Wilson said, “This is not a great environment to be running an airline. Expect a very, very difficult year ahead unless the Strait of Hormuz opens, oil prices fall, and consumer confidence comes back. We weren’t targeting a profit this year, we were targeting a certain amount of loss but we have lost more than we were targeting to lose,” he said.

The board meeting also touched upon the search for Wilson's successor, as he is expected to step down later this year. No official announcement was made by the airline about the internal cost-cutting measures or the new CEO.