Air India Layoffs: No Job Cuts Planned but Salary Increments Deferred by a Quarter Amid Rising Costs
Air India has assured its 24,000-strong workforce that no layoffs are planned despite projected record losses of 22,000 crore INR. However, annual salary increments will be deferred by three months due to high fuel prices and West Asia airspace disruptions. The airline is prioritising cost-optimisation and the elimination of discretionary spending to maintain stability.
Air India has confirmed that it will not proceed with redundancies despite mounting financial pressure caused by the escalating West Asia conflict and rising fuel costs. During a town hall meeting on Friday, the airline’s leadership informed its 24,000 employees that while their jobs are secure, annual salary increments will be deferred by at least one quarter. The Tata group-owned carrier is currently facing estimated record losses of INR 22,000 crore for the 2025-26 financial year.
Air India Salary Increments Deferred Amid Economic Volatility
Chief Executive Officer Campbell Wilson, alongside senior HR and finance officials, addressed staff following a board meeting held on Thursday to deliberate on cost-optimisation measures. Although increments have been postponed, the airline intends to honour bonuses for the previous financial year and move forward with planned staff promotions. Tech Layoffs 2026: Over 101,550 Employees Hit by Job Cuts in 120 Companies So Far This Year; Cloudflare Joins List With 1,100 Reductions.
The management has called for a "relentless focus" on saving costs to navigate the current operating environment. For the time being, the airline has ruled out more drastic measures such as furloughs, opting instead for a strategy of fiscal discipline and the suspension of all discretionary spending.
Impact of West Asia Conflict on Aviation Operations
The ongoing conflict in West Asia, which began in February, has caused significant disruptions to international air corridors. The closure of key airspace in the Gulf region has forced Air India to adopt circuitous routes for its flights to Europe and North America. These longer paths result in increased fuel consumption at a time when global jet fuel prices are surging.
Adding to these complications is the continued closure of Pakistani airspace, which has been in effect since April last year. These combined factors have led to a sharp rise in operating costs, forcing the carrier to curtail parts of its international flight schedule and implement higher fuel surcharges on ticket prices to mitigate the financial impact.
Air India Financial Losses and Revenue Softening
Despite a period of robust growth between 2022 and 2025, where revenue saw a compounded annual growth rate of approximately 40%, the current financial year has seen a significant softening. Chief Financial Officer Sanjay Sharma noted that while fleet expansion drove momentum in the previous year, the airline is now grappling with a record doubling of losses compared to the 2024-25 period. Cloudflare Layoffs: US-Based Cybersecurity Giant Cuts 1,100 Jobs Amid AI-Driven Restructuring; Check Severance Details.
The depreciation of the rupee against the dollar and a nearly threefold jump in aviation turbine fuel (ATF) prices have further dampened consumer confidence. With fuel now accounting for a substantially larger portion of the carrier’s cost structure than the typical 40%, the leadership has urged staff to focus on eliminating wastage and leakages across all departments.
(The above story first appeared on LatestLY on May 08, 2026 08:33 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
