Air India Weighs Cost-Cutting Steps as Losses Mount Amid West Asia Crisis

New Delhi- The board of Air India  has reportedly discussed several cost-cutting measures, including possible employee furloughs and delaying performance-linked bonuses, as the airline faces mounting financial losses and rising operational pressure due to the ongoing conflict in West Asia.

According to multiple reports, the meeting was held at the airline’s headquarters in Gurugram and lasted for over three hours. Discussions centred on the airline’s financial health, expense-control strategies and operational challenges.

The Tata Group-backed carrier is considering a range of austerity measures to manage costs as soaring jet fuel prices and airspace restrictions linked to geopolitical tensions in West Asia continue to impact flight operations.

Among the proposals discussed were temporary unpaid leave for employees and postponement of performance-linked bonus payouts, which are part of staff compensation packages.

The airline has reportedly seen a sharp rise in operational expenses over the past few months because of longer flight routes and higher fuel consumption caused by regional airspace disruptions.

The board also reviewed the airline’s financial performance for the 2025-26 fiscal year and discussed leadership succession plans, including the appointment of a new Chief Executive Officer.

Current CEO and Managing Director Campbell Wilson is expected to step down later this year and is scheduled to address employees during a townhall meeting on Friday.

Reports estimate that the Air India Group posted losses of more than Rs 22,000 crore in the financial year ending March 2026.

Earlier in April, Air India Express
 announced the resumption of flights to Qatar and Bahrain, while also expanding services to destinations in the United Arab Emirates, Oman and Saudi Arabia from April 30, 2026.

The continuing tensions in West Asia have affected the global aviation industry, causing flight disruptions and significantly increasing airline operating costs.

Media reports also indicated that Dubai International Airport recorded a major drop in passenger traffic in March amid the regional crisis.

With inputs from IANS