Air India is considering a series of cost-cutting measures, including reducing flights and trimming employee payouts, as rising global tensions linked to the Iran war continue to pressure the aviation sector.
According to a report by NDTV, people familiar with the matter said that the airline’s board discussed several emergency measures during a meeting held on Thursday. These include reducing flight capacity by more than 20% over the next three months if the geopolitical situation fails to improve.
The discussions also included the possibility of furloughing non-technical staff, lowering bonuses across departments, and implementing salary cuts for employees at the vice president level and above. The people cited did not wish to be identified because the conversations were private.
An Air India spokesperson did not immediately respond to requests for comment.
Also Read | Smoke from power bank sparks emergency evacuation on IndiGo flight
Crisis adds to existing financial troubles
The proposed measures mark one of the first major signs of financial strain at an Indian airline since the Iran conflict disrupted global aviation operations. Airlines across several regions have been facing higher operating costs, route disruptions, and uncertainty due to the ongoing geopolitical tensions.
For Air India, the latest developments come at a time when the carrier is already dealing with mounting financial and operational challenges.
The airline reportedly ended the financial year on March 31 with a record loss of more than 220 billion rupees, or roughly $2.3 billion. The losses have also affected Singapore Airlines, which owns a 25.1% stake in the Tata Group-owned carrier.
Sources said Singapore Airlines has been increasing its operational involvement in Air India as the company attempts to stabilise its business.
Also Read | Flight delays likely as storms lash Delhi; IndiGo issues travel advisory
Leadership transition adds uncertainty
The turbulence comes amid a leadership transition at the airline. Air India is currently searching for a new chief executive officer after Campbell Wilson resigned from the role in April.
The airline industry in India has been navigating a difficult phase over the past year, including airspace restrictions linked to tensions with Pakistan and operational disruptions following a fatal crash involving Air India.
Meanwhile, rival carrier IndiGo appointed aviation veteran Willie Walsh as its new CEO at the end of March as the sector braces for continued volatility and rising operational pressure.
