Facing rising operational costs and global aviation disruptions, Air India has deferred annual salary increments for employees by at least one quarter, even as the airline assured staff that there is no plan for layoffs and that promotions and variable pay will continue.
The announcement was made during a townhall meeting addressed by Air India Chief Executive Officer Campbell Wilson along with Chief Human Resources Officer Ravindra Kumar GP and Chief Financial Officer Sanjay Sharma on Friday, against the backdrop of mounting geopolitical and economic uncertainty affecting the aviation sector globally.
The airline said it is battling multiple external pressures, including the prolonged closure of Pakistan airspace, continuing conflicts in West Asia leading to flight disruptions and airspace restrictions, a weakening rupee, and a steep rise in jet fuel prices, which have reportedly surged between 2.5 and three times.
Addressing employees, Wilson said the current environment demands strict financial discipline and tighter spending controls across the airline.
“We need to focus relentlessly on our costs in these tough times,” Wilson said, asking teams to suspend discretionary expenditure, renegotiate rates wherever possible and postpone non-critical spending.
“There must be a laser sharp focus on eliminating wastage and leakages,” he added, while stressing that customer experience improvements must continue despite the financial pressures.
The development comes at a time when airlines worldwide are grappling with volatile fuel prices, geopolitical instability and weakening travel sentiment, factors that have also begun impacting Air India’s revenue growth in FY26.
Ravindra Kumar GP, however, sought to reassure employees over workforce stability, saying the airline would continue with variable pay payouts for the previous financial year as well as planned promotions.
“We don’t anticipate layoffs,” he said, while confirming that annual increments would be postponed “by at least one quarter” due to the uncertain economic climate.
CFO Sanjay Sharma said Air India had witnessed strong financial momentum over the past few years following its privatisation, with revenue growing at an approximate compounded annual growth rate of 40% between 2022 and 2025. However, he noted that FY26 has seen a softening in revenue amid heightened global uncertainties.
Despite the turbulence, Wilson said the Tata Group-owned airline remains focused on long-term expansion and network strengthening.
According to the airline, Air India completed the retrofit of its legacy narrowbody fleet during FY26 and has also started refurbishment work on its widebody aircraft, with the first upgraded aircraft already back in service.
The airline also undertook network optimisation measures to deploy capacity more efficiently, expanded its India-Europe and India-Far East operations, and increased coordination with Air India Express
by removing overlapping routes and improving network integration.
Air India further said it expanded its Southeast Asia feeder network from two destinations to seven during the year.
Operationally, the airline claimed improvement in domestic on-time performance, which rose from 73% to 76% in FY26, while international on-time performance remained stable despite global disruptions.
The airline also highlighted a sharp improvement in customer satisfaction metrics. According to the figures shared during the townhall, Air India’s Net Promoter Score improved to 30 in March 2026 from 20 in April 2025 and minus 19 in 2023, which the airline attributed to product upgrades and improvements in customer experience.
