Air India forms team to drive cost savings, memo shows, as it deals with host of problems
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Air India is grappling with among other things mounting losses, safety and compliance lapses, as well as Middle East flight disruptions.
PHOTO: REUTERS
- Air India has formed a cross-functional team to cut costs and tightened spending approvals, as CEO Tewolde Gebremariam pushes staff to act with frugality and accountability.
- The airline is under heavy pressure after a US$2.3 billion loss, a fatal crash that killed 260 people, and safety and compliance lapses that have damaged trust.
- Air India also faces higher fuel costs, airspace and Middle East disruptions, and fleet delays, while seeking fresh equity and deferring aircraft deliveries to reduce costs.
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BENGALURU – Air India has set up a dedicated team to identify cost savings across operations and tightened spending approvals as the airline grapples with airspace disruptions, the Middle East conflict and high jet fuel costs, CEO Tewolde Gebremariam told employees in an internal memo.
The carrier faces mounting pressure to restore profitability and rebuild confidence in its safety standards, after recording a loss of US$2.3 billion (S$2.95 billion) in the fiscal year ended March and coming under regulatory scrutiny following a fatal crash in June 2025 that killed 260 people.
In August, two people familiar with the matter told Reuters that Air India was seeking about US$1.5 billion in fresh equity from its owners Tata Sons and Singapore Airlines (SIA).
The airline has also faced safety and compliance lapses, including operating aircraft without valid certifications, while Pakistan’s airspace ban and conflict-related disruptions in the Middle East have forced longer routes, cancellations and cuts to international services.
To add to its problems, a pilot involved in a serious mid-air incident in August tested positive for marijuana.
Air India’s efforts to modernise an ageing fleet have been hampered by shortages of seats and other components, delaying cabin upgrades, while it is seeking to defer deliveries of hundreds of aircraft on order to slash costs.
The challenges confront new chief Gebremariam as he tries to turn around the airline, which has not reported a profit since returning to private ownership in 2022.
The former head of Ethiopian Airlines was appointed on Aug 5 to steer Air India’s revival. He succeeded Campbell Wilson, the former SIA executive appointed in 2022 to lead the carrier’s turnaround after its takeover by the Tata Group. SIA holds the remaining 25.1 per cent stake.
In the memo, Gebremariam said Air India had set up a dedicated cross-functional team to identify cost-saving opportunities across the organisation.
He also announced an employee initiative to reward ideas that cut costs or boost revenue, urging staff to embed frugality and accountability into everyday decisions. REUTERS