Air India implements cost-saving measures amid $2B losses
What's the story
Air India has formed a dedicated team to identify cost-saving opportunities across its operations, Reuters reported. The move comes as the airline struggles with airspace disruptions, high jet fuel costs, and the ongoing conflict in the Middle East. CEO Tewolde Gebremariam revealed this in an internal memo sent to employees. The carrier is under pressure to return to profitability after reporting over $2 billion in losses for the fiscal year ended March.
Financial challenges
Search for fresh equity amid regulatory scrutiny
Air India has been under regulatory scrutiny after a deadly crash in June 2025 that claimed 260 lives.
The airline is reportedly looking for $1.5 billion in fresh equity from its owners Tata Sons and Singapore Airlines.
The carrier has also faced safety and compliance issues, including flying aircraft without valid certifications.
Operational disruptions
Impact of Pakistan's airspace ban and Middle East conflict
The ban on Pakistan's airspace and conflict-related disruptions in the Middle East have forced Air India to take longer routes, cancel flights, and cut international services.
The airline's plan to modernize its aging fleet has also been delayed due to shortages of seats and other components.
In a bid to cut costs, Air India is looking to defer deliveries of hundreds of aircraft on order.
Leadership hurdles
Cost-cutting measures and employee initiative
The challenges come as new CEO attempts to turn around the airline, which has not posted a profit since returning to private ownership in 2022.
In his memo, Tewolde said Air India had formed a dedicated cross-functional team to identify cost-saving opportunities across the organization.
He also announced an employee initiative that rewards ideas for cutting costs or increasing revenue.