Air India forms cost‑savings team as losses widen to over Rs 22,000 crore

Air India has launched a full‑time, cross‑functional Cost Savings Team to hunt for expense cuts as the carrier posted a consolidated loss of Rs 22,238.23 crore for the 2025‑26 financial year.

What Happened

CEO Tewolde Gebremariam, who took charge on Oct 1, told staff that every rupee saved can be reinvested in operations and customer experience. He announced the creation of the multidisciplinary team on Oct 12 to review all spending and identify savings across functions. The airline also introduced ‘PRABHAV - The Value Creator Award’ to collect cost‑reduction ideas from employees, promising rewards for ideas that are put into practice. The award will accept suggestions on smarter working, better utilisation, process improvements, contract optimisation, insourcing, efficient procurement, waste reduction, revenue‑generating opportunities and extracting more value from existing assets.

Reaction

Gebremariam stressed that a culture of frugality, accountability and thoughtful decision‑making must permeate every task. He said cost cuts cannot rely on a single team; every employee’s participation is essential. He also noted that from Oct 1 the approval matrix for staff‑on‑duty decisions now requires clearance from the Head of Department, the CXO and the CEO, aiming for greater rigour and transparency.

Context

The move comes as Air India, jointly owned by the Tata Group and Singapore Airlines, faces “exceptionally challenging” operating conditions, including ongoing airspace closures, the Middle‑East conflict and persistently high jet‑fuel prices. The carrier’s loss widened from Rs 10,858.83 crore a year earlier, while total income fell to Rs 71,869.94 crore from Rs 78,635.61 crore.