Air India tightens spending, forms team to identify cost savings

In an internal memo to employees, CEO Tewolde Gebremariam said the airline had formed a cross-functional team to identify areas where spending could be reduced.The measures come at a challenging time for the airline, which is dealing with financial losses, operational disruptions and the need to strengthen its safety standards.New Delhi,Oct 15, 2026 14:00 ISTAir India has set up a dedicated team to find ways to cut costs across its operations as the airline faces higher jet fuel prices, airspace disruptions and the impact of the conflict in the Middle East.In an internal memo to employees, CEO Tewolde Gebremariam said the airline had formed a cross-functional team to identify areas where spending could be reduced. The airline has also tightened spending approvals as it looks to manage costs and improve its financial position, reported Reuters.The airline is under pressure to return to profitability after reporting a loss of more than $2 billion in the financial year ended March. It is also working to rebuild confidence in its safety standards following a fatal crash in June 2025 that killed 260 people, the report mentioned.In the memo, Gebremariam said the airline had launched an initiative to encourage employees to suggest ideas that could reduce costs or increase revenue. Staff members are being urged to make cost-conscious decisions and take greater responsibility for spending in their day-to-day work. Air India is also facing operational challenges due to Pakistan's airspace ban and disruptions linked to the conflict in the Middle East. These have forced the airline to take longer routes, cancel flights and reduce some international services.The airline has also come under regulatory scrutiny over safety and compliance lapses, including operating aircraft without valid certifications.FLEET UPGRADES ADD TO CHALLENGES Air India's efforts to modernise its ageing fleet have been affected by shortages of seats and other components, delaying cabin upgrades.The airline is also seeking to defer deliveries of hundreds of aircraft on order as it looks to control costs.In August, Air India was reported to be seeking around $1.5 billion in fresh equity from its owners, Tata Sons and Singapore Airlines, as it faces mounting financial pressure.NEW CEO FACES TURNAROUND CHALLENGEThe cost-cutting push comes as Gebremariam takes on the task of turning around the airline. Air India has not reported a profit since returning to private ownership in 2022.The new team will look for savings across the organisation, while the employee initiative aims to make cost control a part of everyday decisions.The measures come at a challenging time for the airline, which is dealing with financial losses, operational disruptions and the need to strengthen its safety standards.- Ends