Air India has launched a company-wide cost-cutting initiative as financial losses, airspace restrictions and high jet fuel prices add pressure to its turnaround efforts, according to an internal memo from CEO Tewolde Gebremariam to employees.
The airline has established a dedicated cross-functional team to identify savings across its operations and introduced stricter controls on spending approvals. The initiative also includes an employee programme designed to reward ideas that reduce costs or generate additional revenue.
The measures come as Air India seeks to return to profitability and rebuild confidence in its safety standards. The carrier reported a loss of more than $2 billion in the fiscal year ended March and has faced regulatory scrutiny following a fatal crash in June 2025 that killed 260 people.
In August, two people familiar with the matter told Reuters that the airline was seeking approximately $1.5 billion in fresh equity funding from its owners, Tata Sons and Singapore Airlines.
Operational Challenges Add to Financial Pressure
Air India has faced a series of operational difficulties, including safety and compliance shortcomings. These have included operating aircraft without valid certifications, while Pakistan's airspace ban and conflict-related disruptions in the Middle East have forced longer flight routes, cancellations and reductions in international services.
The airline's fleet modernisation programme has also encountered obstacles. Shortages of seats and other components have delayed cabin upgrades, while Air India is seeking to defer deliveries of hundreds of aircraft on order to manage expenditure.
These challenges confront Gebremariam as he attempts to overhaul the carrier, which has not reported a profit since returning to private ownership in 2022.
In his memo, the CEO called on employees to make cost-conscious decisions and strengthen accountability throughout the organisation. The new initiative is intended to encourage staff at all levels to identify opportunities to improve efficiency and increase revenue.
The cost-control measures form part of Air India's broader effort to manage financial pressures while addressing operational challenges and advancing its long-term turnaround plans.
Source: Reuters