Air India sets up panel to identify cost-saving opportunities across units

Air India has set up a multi-disciplinary team to identify cost-saving opportunities across its operations and tightened spending approvals as it faces high jet fuel prices, airspace disruptions and the impact of the conflict in West Asia, news agency PTI reported.

Chief Executive Officer and Managing Director Tewolde Gebremariam has reportedly asked employees to adopt a culture of frugality and accountability.

In a message to employees earlier this week, Gebremariam said the airline had established a full-time, cross-functional team to review expenditure across the organisation, PTI reported. He took charge as CEO and MD on October 1.

“Every rupee saved creates an opportunity to reinvest in areas that matter most, including operations and customer experience,” he said, reported PTI.

Employee initiative to reward cost-saving ideas

Air India will also launch ‘PRABHAV – The Value Creator Award’ to invite employees to suggest ways to reduce costs and improve revenue. Employees whose ideas are implemented will be rewarded, according to Gebremariam's message cited by PTI.

The report said the initiative will cover measures such as improving resource utilisation, streamlining processes, renegotiating contracts, bringing outsourced activities in-house and improving procurement of goods and services. Employees can also suggest ways to reduce waste, question existing practices, make better use of resources and generate additional revenue from existing products, services and capabilities.

Gebremariam said cost reduction would require participation across the organisation and could not be driven by a single team.

“Alongside operational excellence, we need to embed a mindset of frugality, accountability, and thoughtful decision-making in everything that we do,” PTI quoted him as saying.

Gebremariam added that employees could contribute to the airline's long-term performance through prudent spending and operational improvements.

Spending approvals tightened

The airline has also revised its approval matrix for Staff On Duty (SOD). From October 1, approvals are to be routed through the head of department (HOD), chief experience officer (CXO) and CEO.

The changes are intended to bring greater scrutiny and transparency to spending decisions, according to Gebremariam's message.

The cost-control measures come as Air India deals with operational disruptions caused by airspace closures and the conflict in the West Asia, alongside persistently high jet fuel costs. These factors have put pressure on airlines across the industry, he said, as reported by PTI.

Reuters reported that the airline was also facing regulatory scrutiny over safety and compliance issues following the June 2025 crash that killed 260 people. Airspace restrictions and conflict-related disruptions have forced longer routes, cancellations and cuts to international services, the report said.

Consolidated loss more than doubles

Air India's consolidated loss widened to ₹22,238.23 crore in the financial year ended March 2026, from ₹10,858.83 crore in the previous year. Its total income declined to ₹71,869.94 crore from ₹78,635.61 crore during the same period, according to regulatory filings. The consolidated figures include Air India Express.

Air India has not recorded a profit since returning to private ownership in 2022. The airline is jointly owned by the Tata Group and Singapore Airlines.

Gebremariam, a veteran of Ethiopian Airlines, succeeded Campbell Wilson as Air India’s CEO and managing director. He is the second foreign national to head the airline since its acquisition by the Tata Group in January 2022.