Air India has instructed its employees to implement stringent cost discipline measures in response to escalating geopolitical tensions in West Asia, persistently high jet fuel prices, and a weakening Indian rupee. The directive came from CEO Campbell Wilson during an internal townhall, where he outlined the challenging external environment facing the airline industry.
Geopolitical Headwinds and Economic Pressures
Wilson, joined by Chief Human Resources Officer Ravindra Kumar GP and Chief Financial Officer Sanjay Sharma, explained that the airline is navigating a difficult period marked by the prolonged closure of Pakistani airspace, which forces longer and more expensive international routes. These geopolitical conflicts, particularly across West Asia, are expected to persist for the foreseeable future, impacting travel sentiment and operational costs.
The management highlighted that jet fuel prices have surged significantly, increasing by 2.5 to 3 times in recent months. Fuel constitutes a major portion of operating costs for international flights. Adding to this pressure, the depreciation of the Indian rupee has inflated dollar-denomdenominated expenses such as aircraft leasing and maintenance.
Relentless Focus on Costs
Against this backdrop, Wilson called for a “relentless focus on costs” across all departments. Employees were urged to:
- Suspend discretionary spending.
- Renegotiate vendor contracts wherever possible.
- Defer non-critical expenditures.
“There must be a laser sharp focus on eliminating wastage and leakages,” Wilson emphasized, while also reassuring employees that improvements to customer experience would continue despite the tighter spending controls.
Workforce Stability and Financial Outlook
While annual salary increments will be deferred by at least one quarter due to the economic uncertainty, CHRO Ravindra Kumar GP confirmed that variable pay payouts for the previous financial year and planned promotions would proceed. Crucially, the management stated that layoffs are not anticipated at this stage, aiming to maintain workforce stability.
The airline noted strong financial momentum through FY25, driven by rapid fleet expansion and revenue growth. However, FY26 has seen softer revenues amid the global uncertainties. Despite these financial pressures, operational metrics have shown improvement, with domestic on-time performance rising to 76% in FY26 and the customer Net Promoter Score (NPS) significantly improving to 30 in March 2026 from minus 19 in 2023, reflecting ongoing product and service upgrades.