Air India CEO Initiates Strategic Cost-Cutting and Restructuring Committee
CEO Tewolde Gebremariam targets operational efficiency and lease reductions amid rising financial losses.
1Strategic Leadership Shift
CEO Tewolde Gebremariam, formerly of Ethiopian Airlines, assumed his role on October 1. He immediately prioritized cost discipline as a core element of the airline's organizational culture. His mandate focuses on achieving sustainable profitability, safety, and operational reliability while addressing the significant financial challenges currently facing the carrier under Tata Group ownership.
2Committee Mandate Defined
A newly formed committee is tasked with identifying specific cost-saving opportunities across Air India and its subsidiary, Air India Express. The scope includes rationalizing internal teams to eliminate redundancies and reviewing real estate footprints. This initiative aims to streamline operations and improve overall efficiency following a period of significant financial instability.
3Real Estate Optimization
The committee is specifically evaluating the relocation of office spaces currently occupied by Air India Express. By consolidating facilities, the airline intends to lower annual lease expenses significantly. This move represents a broader effort to reduce overhead costs as the company grapples with a consolidated loss of ₹22,238.23 crore reported in March 2026.
4Financial Performance Context
The airline's financial health has deteriorated, with losses more than doubling from ₹10,858.83 crore in the previous year. Total income also saw a decline, dropping to ₹71,869.94 crore from ₹78,635.61 crore in 2024-25. These figures highlight the urgent necessity for the cost-reduction measures currently under review by the board of directors.
5Operational Headwinds Faced
Air India has navigated a series of severe challenges, including geopolitical disruptions and volatile fuel prices. The tragic AI171 crash in June 2025, which resulted in 260 fatalities, compounded these operational difficulties. These external pressures have forced the leadership to re-evaluate internal structures to ensure long-term viability and maintain essential safety standards.
6Incentivizing Employee Efficiency
Gebremariam plans to launch internal programs designed to reward employees for proposing measurable savings and efficiency improvements. By fostering a culture of accountability, the CEO hopes to engage staff in the recovery process. This bottom-up approach complements the top-down restructuring efforts currently being explored by the newly established executive committee.
7Board Oversight Process
The airline's board of directors is scheduled to meet this Thursday to discuss the proposed cost-cutting measures. While the committee's specific recommendations remain internal, the board's involvement ensures that any restructuring or relocation plans align with the strategic vision of the Tata Group and Singapore Airlines, the joint owners of the carrier.
8Future Outlook Uncertain
Despite the clear focus on expense control, the specific extent of team restructuring remains undefined. The airline has not yet provided further details on the timeline for these changes. Success will depend on balancing aggressive cost-cutting with the need to maintain operational reliability in an increasingly competitive and challenging global aviation market.