Air India has decided to postpone annual salary increments for employees by at least one quarter as the airline looks to tighten spending amid mounting operational and economic pressures. The decision was communicated to staff during a town hall meeting on Friday, attended by chief executive officer Campbell Wilson, chief human resources officer Ravindra Kumar GP and chief finance officer Sanjay Sharma.
The airline, however, clarified that it is not considering layoffs at this stage.
“We will continue to pay the performance-related variable pay for last year, that’s decided — the increment for this year we will defer. We will consider as the environment evolves over the course of the year if and when we can pay it. We have budgeted to pay it when the environment gets better, but we are going to withhold it for now…We do not anticipate any need for retrenchments,” Wilson told employees.
Rising costs and global disruptions hit operations
During the meeting, Wilson pointed to several external factors that have added pressure on the aviation sector in recent months. These include the continued closure of Pakistani airspace, geopolitical tensions affecting West Asia, disruptions to key flight routes, a weaker rupee and a steep rise in aviation fuel prices.
Also Read | Smoke from power bank sparks emergency evacuation on IndiGo flight
According to Wilson, jet fuel prices have risen nearly threefold, significantly impacting airline costs.
“We weren’t targeting a profit this year, we were targeting a certain amount of loss. We lost more than we were targeting to lose, if you get what I’m saying, but the point is that we achieved 56% of what we had set out to do on the financial front,” he said.
Focus on cost control and network changes
The Air India CEO also urged employees to reduce discretionary spending and closely monitor operational expenses.
“We need to focus relentlessly on our costs in these tough times,” Wilson said. “There must be a laser-sharp focus on eliminating wastage and leakages.”
He added that the airline is continuing efforts to improve efficiency through technology upgrades, expansion of fleet capacity and induction of newer, fuel-efficient aircraft.
Also Read | Can AI stop airport crashes? Bengaluru airport is betting on it
Explaining the impact of ongoing West Asia airspace restrictions, Wilson said some routes have become commercially unviable.
“With the airspace constraints being what they are, some of the routes we used to operate are not as profitable or indeed a loss-making, those we need to pull back. Sometimes it will be pulling back frequency, sometimes it might be suspending routes entirely. We will go back when circumstances change, but we need to be agile to change our network.”
Meanwhile, CFO Sharma said that although fiscal 2025 saw strong revenue growth and fleet expansion, the current financial year has begun with softer revenue trends amid global uncertainties.
