Air India has asked employees to exercise strict cost discipline as rising geopolitical tensions, volatile fuel prices and a weakening rupee create fresh pressure on the airline industry, according to sources who attended an internal townhall addressed by Air India CEO Campbell Wilson on Friday.

Speaking alongside Chief Human Resources Officer Ravindra Kumar GP and Chief Financial Officer Sanjay Sharma, Wilson told employees that the airline is navigating a difficult external environment marked by prolonged closure of Pakistani airspace, escalating geopolitical conflicts across West Asia, higher jet fuel costs and weakening travel sentiment.

Sources told Business Today TV that Wilson cautioned employees that these headwinds are likely to persist “for the foreseeable future”, particularly the continued closure of Pakistan’s airspace, which has forced airlines to take longer international routes and increased operational expenses.

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The airline’s management highlighted that jet fuel prices have surged between 2.5 to 3 times in recent months, significantly affecting international operations where fuel forms one of the largest components of operating costs. The depreciation of the Indian rupee has added further pressure on expenses, especially on dollar-denominated aviation costs such as leasing and maintenance.

Against this backdrop, Wilson urged employees to adopt what he described as a “relentless focus on costs”. According to sources, the Air India chief asked teams across departments to suspend discretionary spending, renegotiate vendor contracts wherever possible and defer non-critical expenditure.

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“There must be a laser sharp focus on eliminating wastage and leakages,” Wilson said during the townhall, while emphasizing that customer experience improvements should continue despite tighter spending controls.

The management, however, attempted to reassure employees on workforce stability. CHRO Ravindra Kumar GP said the airline would proceed with variable pay payouts for the previous financial year and continue planned promotions. While annual salary increments will be deferred by at least one quarter due to economic uncertainty, he told employees that layoffs are not anticipated at this stage.

Management shares that the airline had witnessed strong financial momentum through FY25, driven by rapid fleet expansion and revenue growth. However, FY26 has begun with softer revenues amid global uncertainties.

Operational metrics have also improved, with domestic on-time performance rising to 76% in FY26, while customer Net Promoter Score improved sharply to 30 in March 2026 from minus 19 in 2023, reflecting ongoing product and service upgrades.

Published on: May 8, 2026 7:23 PM IST