The escalation of the Iran conflict has had a considerable impact on the Indian airline Air India, which is now contemplating significant cost-cutting measures. Following a board meeting, the airline discussed furloughing non-technical staff and reducing its flight capacity by more than 20% over the upcoming three months if the geopolitical situation does not improve. Additionally, proposals include lowering employee bonuses and implementing pay cuts for senior executives. These steps are part of Air India's broader effort to counteract substantial financial losses, with the carrier ending the fiscal year with a record deficit of over 220 billion rupees.
Singapore Airlines, which owns a 25.1% stake in Air India, has reported that its earnings have been adversely affected by Air India's financial troubles. Industry experts suggest that the airline's new measures reflect an urgent response to the challenges posed by the Iran war, including disruptions to airspace and rising fuel prices. Amidst these difficulties, Air India is also searching for a new CEO to help steer the airline through this period of instability.
