Air India on Friday (May 8) organised a townhall to its employees and assured them the company does not “anticipate layoffs” although annual salary increments will be “deferred” by at least one quarter.
According to sources who spoke to Financial Express Online, Air India Chief Human Resources Officer Ravindra Kumar GP sought to reassure employees about workforce stability. He said the airline would proceed with variable pay payouts for the previous financial year and continue with planned promotions.
“We don’t anticipate layoffs,” he said, according to sources, although annual salary increments will be deferred by at least one quarter due to the uncertain business environment.
Outgoing CEO Campbell Wilson also addressed employees across Air India. He warned of mounting external pressures on the aviation industry while reassuring staff that the airline remains focused on stability, growth and operational transformation.
Wilson outlined several geopolitical and macroeconomic challenges affecting airline operations globally, including the continued closure of Indian airlines in Pakistani airspace and escalating conflicts across West Asia that have disrupted major international flight corridors.
The outgoing CEO also pointed to the weakening rupee and a steep rise in aviation turbine fuel (ATF) prices, estimated at nearly 2.5 to 3 times previous levels, as significant stress points for the industry.
With jet fuel accounting for a major share of airline operating costs, the volatility has intensified financial pressure, particularly on international routes.
‘Relentless focus on costs’
Against this backdrop, Wilson urged employees to adopt a far stricter approach toward spending and operational efficiency. “We need to focus relentlessly on our costs in these tough times,” he told employees, according to sources.
He reportedly called for suspending discretionary expenditure, renegotiating vendor rates wherever feasible and deferring non-critical spending. “There must be a laser-sharp focus on eliminating wastage and leakages,” Wilson said, while stressing that customer experience improvements should continue despite tighter cost controls.
The emphasis mirrors growing pressure on global airlines as rising fuel costs, airspace disruptions and currency fluctuations squeeze margins amid broader economic uncertainty.
Revenue momentum slows amid global uncertainty
Chief Financial Officer Sanjay Sharma acknowledged that while Air India witnessed strong revenue growth and fleet expansion through FY25, the current financial year has begun with softer revenue momentum due to external disruptions.
The slowdown follows a period of rapid expansion after the airline’s privatisation under the Tata Group in 2022.
According to Sharma, Air India recorded an approximate 40% compound annual growth rate (CAGR) in revenue between 2022 and 2025, driven by network expansion, fleet additions and operational improvements.
Transformation plan continues despite turbulence
Despite current headwinds, Wilson reiterated that Air India remains focused on long-term transformation and network optimisation.
The airline completed the retrofit of its legacy narrowbody fleet during FY26 and has begun upgrading its widebody aircraft, with the first refurbished aircraft already back in service.
Air India has also accelerated network restructuring to improve aircraft deployment efficiency, strengthen India-Europe and India-Far East connectivity and deepen operational synergies with Air India Express by reducing overlapping routes.
Additionally, the airline expanded its Southeast Asian feeder network from two destinations to seven, reflecting its broader hub-building strategy.
Operational metrics show improvement
Operationally, the airline reported gains in punctuality and customer satisfaction despite external disruptions.
Domestic on-time performance improved from 73% to 76% during FY26, while international OTP remained stable despite geopolitical disruptions and airspace-related challenges.
Air India’s Customer Net Promoter Score (NPS) also improved significantly, rising to 30 in March 2026 from 20 in April 2025, showing improved passenger perception amid ongoing fleet and service upgrades.