Air India Postpones Yearly Increments by 1 Quarter; Job Cuts Ruled Out

Air India has deferred annual salary increments by at least 1 quarter as the airline faces rising operational costs linked to higher fuel prices and airspace restrictions, as per PTI reports. The decision was communicated to employees during an internal townhall held on Friday. 

The meeting was attended by Air India Chief Executive Officer and Managing Director Campbell Wilson, Chief Financial Officer Sanjay Sharma and Chief Human Resources Officer Ravindra Kumar GP. 

Management Calls for Cost Control 

During the townhall, employees were asked to suspend discretionary spending and defer non-critical expenditure. Management also advised teams to renegotiate vendor contracts and monitor avoidable expenses more closely. 

According to the report, Wilson said the airline needed a stronger focus on cost management due to the current business environment. He also referred to the need to reduce operational leakages and wastage across departments. 

The Tata Group-owned airline has been dealing with increased costs following the continued closure of Pakistan airspace and disruptions arising from the West Asia conflict. 

Fuel Prices  

Management informed employees that aviation turbine fuel prices had risen sharply in recent months.  

Fuel expenses, which generally account for around 40% of operating costs for Indian airlines, are estimated to have increased to nearly 50-60% for some carriers after the recent surge. 

Currency Impact 

The depreciation of the rupee has added pressure on airlines as several payments, including aircraft leasing and maintenance expenses, are linked to the US dollar. 

Reports suggest Air India has also seen softer revenue growth in FY26 due to external uncertainties, despite reporting expansion in previous years after its privatisation in 2022. 

No Layoffs Expected 

The airline said variable pay for the previous financial year, and planned employee promotions would continue despite the delay in annual salary increments. 

Ravindra Kumar GP told employees that layoffs were not anticipated. He said the deferment of increments was linked to the uncertain economic environment and current industry conditions. 

Operational Performance 

Air India said fleet refurbishment work remains underway. The airline recently completed retrofit work on its legacy narrowbody fleet and has started upgrades for widebody aircraft. 

Management said domestic on-time performance improved from 73% to 76% in FY26 despite operational disruptions linked to geopolitical developments. 

Read More: TRAI Proposes Penalty of Up to ₹50 Lakh on Telecom Operators for Improper Handling of Consumer Complaints! 

Conclusion  

Air India has introduced cost-control measures as operational expenses rise due to fuel prices and airspace restrictions.  

The airline said promotions and variable pay will continue, while annual increments remain deferred for at least one quarter. 

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