Air India: Air India, the Tata Group-owned airline, which has around 24,000 employees, asserted that the firm has no plan to carry out job cuts. Air India Chief Executive Officer & Managing Director (CEO & MD) Campbell Wilson on Friday told the staff that it is going to be a "very, very difficult year" if things don't improve on the Middle East front.
The airline that was hit hard by Pakistan airspace closure and Iran war, has resorted to cost-cutting measures, including holding back annual increments for staff and asking them to cut discretionary spending as well as non-critical expenditures, warning of "tough times". The development comes a day after the loss-making airline's board discussed various cost-saving steps.
ALSO READ: Delhi Weather Disrupts Flights For Second Day; Diversions To Lucknow, Jaipur
A Tough Year Ahead: Air India CEO
In an address to employees during a townhall on Friday, the top leadership of the firm emphase on the need to keep a close watch on costs. Wilson, along with Chief Financial Officer (CFO) Sanjay Sharma and Chief Human Resources Officer (CHRO) Ravindra Kumar GP, told staff to prepare for a difficult year.
With higher jet fuel prices due to the West Asia conflict and airspace curbs, the loss-making airline's expenses have spiralled in recent times and against this backdrop, Sharma also told staffers that FY26 has seen a softening in revenue amid heightened external uncertainties.
ALSO READ: Air India To Cut International Flights As Fuel Costs Rise Amid US-Iran War; Check Affected Routes
Costs To Remain in Focus
Wilson urged employees to suspend discretionary spending, renegotiate rates where feasible, and defer non-critical expenditures, asserting that a relentless focus on costs in these tough times is compulsory.
"There must be a laser-sharp focus on eliminating wastage and leakages," he said. Stressing the need to tighten the belt for a while, Wilson sounded optimistic that travel demand would rebound and the industry would continue on its upward path.
We Don't Anticipate Layoffs:CHRO
CHRO Ravindra Kumar told staff that the airline will proceed with variable pay for the last financial year and continue with planned promotions while noting that annual increments will be deferred by at least one quarter. "We don't anticipate layoffs," he said. At the airline's board meeting on Thursday, various cost-saving steps, including likely furloughs, were discussed. Generally, furlough refers to sending staff on unpaid leaves by companies during a tough financial situation.
During the townhall, CFO Sanjay Sharma said while strong revenue growth and fleet expansion drove financial momentum through FY25, FY26 has seen a softening in revenue amid heightened external uncertainties.
Air India has seen around 40 per cent CAGR (Compounded Annual Growth Rate) in revenue between 2022 and 2025, he added.
The airline was acquired by the Tata Group from the government in January 2022.
The Air India CEO mentioned the external challenges being facing the aviation industry as a whole, including the continued closure of Pakistan airspace that is expected to persist for the foreseeable future and geopolitical conflicts leading to disruptions and airspace closures across West Asia.
(With PTI inputs)