Air India may suspend routes, defer salary hikes
What's the story
Air India, one of the leading airlines in the country, is considering reducing flight frequencies or even suspending services on certain routes. The move comes as some flights have become less profitable or are now loss-making due to airspace constraints. Campbell Wilson, CEO and MD of Air India, revealed this during a recent town hall meeting with staff members.
Strategic changes
Deferring annual increments
During the meeting, Wilson also announced some cost-saving measures. These include deferring annual increments and urging employees to cut down on discretionary spending. "We will continue to do the things that improve revenues and continue to do things to improve costs," Wilson said, emphasizing the airline's commitment to financial stability amid these challenges.
Flight operations
Need to be agile to change our network: Wilson
Currently, Air India has a fleet of around 190 planes and operates some 8,000 flights weekly. However, Wilson noted that certain routes are no longer as profitable or are now loss-making due to airspace constraints. He said the airline would either reduce frequency or suspend these routes entirely, but would return when circumstances change. "We need to be agile to change our network," he told staff members during the meeting.
Operational costs
Jet fuel prices have increased operational costs
The closure of Pakistan's airspace and rising jet fuel prices due to the conflict in West Asia have increased Air India's operational costs. Wilson had earlier said that these factors have made many international flights unprofitable to operate. "Massive rise in jet fuel prices, which, together with airspace closures and longer flying routes, has caused many of our international flights to become unprofitable to operate," he had said in a message to staff members on May 1.