Air India forms cost savings team and tightens spending approvals

Air India has established a dedicated, full-time cost-savings team and tightened spending controls across its operations as management moves to counter persistent cost pressures from expensive jet fuel and geopolitical airspace closures.

In an internal communication to staff, chief executive Tewolde Gebremariam announced that the multidisciplinary team will systematically audit all company expenditure. The airline has also tightened its internal approval rules: effective 1 October, all staff-on-duty travel requests must receive sign-off from the relevant head of department, the chief experience officer, and the chief executive himself.

Why Air India is cutting spending

The airline's cost drive comes as Indian carriers navigate significant external headwinds. Conflict across West Asia and airspace restrictions over Pakistan have forced long international detours, pushing up fuel consumption and forcing selective schedule trims.

At the same time, global supply chain bottlenecks have created severe shortages of aircraft seats and replacement components. Those shortages have slowed cabin refurbishments across Air India's legacy fleet and prompted the airline to seek delivery deferrals on portions of its massive aircraft order book to protect capital.

Air India recorded a loss exceeding $2 billion in the financial year ended March, and its owners, Tata Sons and Singapore Airlines, were approached in August to inject roughly $1.5 billion in fresh equity.

Gebremariam told employees that financial resilience would depend on consistent internal discipline rather than isolated cuts. "Cost consciousness must become part of our culture," he wrote, urging staff to adopt frugality and accountability. "Every rupee we save creates an opportunity to reinvest in areas that matter most, whether it is enhancing our operations, improving our products and customer experience, or strengthening the foundations for our future growth."

Rewarding ideas across the workforce

To drive the effort, the carrier has launched an internal scheme titled "PRABHAV – The Value Creator Award". The programme invites employees to submit practical ideas to trim overheads and eliminate waste, covering areas such as contract renegotiations, insourcing vendor work, and resource utilisation. Submissions will go through a formal evaluation, with accepted proposals receiving internal recognition and rewards.

Network expansion continues

Despite the near-term belt-tightening, the group is maintaining its broader commercial expansion. Gebremariam highlighted the rapid scaling of low-cost subsidiary Air India Express, which has scheduled nearly 585 daily flights across 220 routes and 65 stations for the upcoming winter schedule from 25 October, operated by a fleet of more than 105 aircraft.

Management is also reviewing maintenance agreements, including high engine service bills for its new Airbus A350 fleet, to secure better operational value as the wider airline turnaround proceeds.