Air India CEO Implements Strict Cost-Control Measures Amid Rising Losses
Tewolde Gebremariam mandates new spending approvals to stabilize finances and improve operational profitability.
1Strategic Shift in Leadership
CEO Tewolde Gebremariam has initiated a rigorous belt-tightening strategy less than a month into his tenure. Following his 28 September town hall, he signaled a pivot from fleet modernization to sustainable profitability. This transition aims to convert previous large-scale investments into tangible operational performance and financial stability for the airline group.
2Centralized Approval Framework
Effective 1 October, Air India implemented a new expenditure control system requiring all spending to pass through department heads, CXOs, and the CEO. This structure replaces previous decentralized processes to ensure greater transparency and alignment. The move is designed to enforce financial discipline across the flagship carrier and Air India Express.
3Cross-Functional Savings Team
A dedicated multidisciplinary team has been established to systematically review all organizational expenditures. This group operates on a full-time basis to identify cost-saving opportunities across all functions. Employees are encouraged to participate through a new reward scheme that recognizes ideas for contract renegotiations, procurement improvements, and effective waste reduction strategies.
4Impact of External Disruptions
Operational costs have surged due to significant geopolitical and logistical challenges. The closure of Pakistani airspace since April 2025 forces longer flight paths, increasing fuel consumption and crew expenses. Additionally, Middle East conflicts and supply-chain shortages continue to delay fleet modernization programs, placing persistent pressure on the airline's overall operational reliability.
5Escalating Fuel and Forex Costs
Delhi aviation turbine fuel prices climbed approximately 13% in October, reaching ₹137 per litre. This rise, combined with significant forex losses of ₹5,033 crore for Air India in FY26, has strained the balance sheet. Currency volatility has notably increased the burden of dollar-denominated aircraft leases and other critical international operational expenses.
6Financial Performance Overview
The Air India Group reported a consolidated net loss of ₹22,238 crore for FY26, doubling the previous year's loss of ₹10,859 crore. Standalone losses for Air India reached ₹15,368 crore, while Air India Express recorded a loss of ₹6,767 crore. These figures underscore the urgent necessity for the newly implemented cost-management initiatives.
7Capital Infusion and Support
Since acquiring the airline in January 2022, Tata Sons has invested ₹45,347 crore into the business. The board has approved in principle an additional capital infusion exceeding ₹10,000 crore, contingent upon the submission of viable business cases. This funding remains critical for supporting the airline's ongoing turnaround and future growth foundations.
8Focus on Operational Productivity
Gebremariam emphasizes boosting revenue productivity, specifically targeting metrics like revenue per available seat kilometer. By fostering a culture of collective responsibility, the leadership aims to reinvest saved capital into customer experience and operational enhancements. The success of this turnaround depends on the active commitment of every employee to these new measures.