Facing serious headwinds, Air India sharpens cost control focus

NEW DELHI: Air India MD and CEO Tewolde Gebremariam has set up a “multidisciplinary, cross-functional cost savings team” to find all possible ways and means of reducing expenditure “on full-time basis” amid mounting losses. Air India reported a loss of about $2.3 billion in 2025-26, the biggest annual loss since the Tata Group acquired the airline along with AI Express in Jan 2022. Overall, since then the airline has lost about $5.7 billion due to a combination of both internal and external factors.“While many external factors remain beyond our control, how we manage costs is something each of us can influence every day. Cost saving… requires active participation and commitment of every employee… Alongside operational excellence, we need to embed a mindset of frugality, accountability, and thoughtful decision-making in everything we do. We should continually challenge ourselves to ask – is this expenditure necessary? Is there a more efficient way to achieve the same outcome? Small decisions, taken consistently across the organisation, can collectively strengthen our financial resilience,” said Tewolde in his first internal note to employees after recently getting security clearance to take over as Air India CEO.While airlines globally have been facing elevated oil prices since the West Asia crisis along with other geopolitical challenges, Indian carriers have been worse off due to the rupee crashing and Pakistan airspace closure only for them. For Air India, the situation is even worse post the deadly Ahmedabad crash last June. Tata-owned AI’s first CEO Campbell Wilson resigned citing personal reasons and now it is up to the former Ethiopian Airlines CEO to revive the Maharaja.“…a multidisciplinary, cross-functional cost savings team has been established on full-time basis to identify cost-saving opportunities across the organisation. They will systematically review all expenditure and identify cost-saving opportunities across functions,” his memo says.“This spirit of unity and collaboration becomes even more important as we navigate an exceptionally challenging operating environment. Ongoing airspace closures, the conflict in the Middle East and its resulting operational disruptions, and persistently high jet fuel costs continue to place significant pressure on airlines across the industry. While these challenges may test us, they also reinforce the importance of standing together, supporting one another, and working collectively toward our shared goals. Our ability to overcome these headwinds will depend not on individual efforts, but on how effectively we come together as one team,” he said.You use AI every day. Now get your AI Quotient. Take the AIQ test.