Air India is contemplating various measures to address its mounting financial difficulties and operational challenges. According to recent reports, the airline is considering furloughs for non-technical staff, reductions in bonuses, executive pay cuts, and decreasing flight capacity by over 20% during the period from May to July 2026. These potential actions stem from the worsening impact of geopolitical conflicts, notably the Iran war, which has compounded existing pressures on the airline.
During a board meeting held on May 7, the airline discussed these options, which could be implemented if conditions do not improve. The airline posted a record loss of more than INR220 billion (USD2.3 billion) for the fiscal year ending March 31, 2026. The conflict and related airspace restrictions have led Indian carriers to operate longer routes to Europe and North America, increasing fuel costs and reducing demand.
Workforce and Ethical Measures
In addition to financial hardships, Air India has terminated more than 1,000 employees since 2023 over ethical breaches such as misuse of staff travel benefits, smuggling, and unauthorized baggage allowances. These disciplinary actions are separate from the ongoing cost-cutting plans.
The airline, based at Delhi International Airport, operates a fleet of 188 aircraft covering 88 destinations with 147 routes, along with 629 daily flights. The situation underscores the airline's need to adapt to geopolitical tensions and rising operational costs in the near future.
