Air India to slash 800 domestic flights, IndiGo will reduce 7% services amid fuel crisis

Air India is preparing a series of cost-cutting measures, including possible salary reductions for Vice President-level officials and a reduction of nearly 20% in flight operations, amid rising operational expenses linked to the ongoing conflict in the Middle East. According to reports, the Tata Group-owned airline discussed these proposals during a recent board meeting, where options such as sending non-technical staff on leave and reducing employee bonuses were also considered. The airline currently operates approximately 900 flights daily and is reportedly planning to scale down flight frequency over the next 90 days due to increasing fuel costs and operational pressures. The airline is also continuing its search for a new Chief Executive Officer following the resignation of Campbell Wilson in April.

The airline’s operational challenges have intensified due to tensions involving Iran and Israel, which have forced Air India to reroute flights travelling to Europe and the United States through longer paths. These diversions have reportedly increased flight durations by nearly two hours on several routes, leading to significantly higher fuel consumption. At the same time, Air India is undertaking a large-scale fleet modernization and cabin overhaul programme under the Tata Group, while also bearing substantial maintenance costs for its aging Boeing aircraft fleet. Additional financial pressure has emerged from legal and operational expenses linked to its merger-related processes with Singapore Airlines.

Reports further indicate that crude oil prices have risen sharply since February due to geopolitical tensions involving Iran, resulting in a steep increase in Aviation Turbine Fuel costs, particularly for international operations. Industry sources state that fuel expenses, which previously accounted for nearly 40% of airline operational expenditure, have now increased to nearly 60%. Against this backdrop, Air India’s board is understood to have proposed a temporary reduction in operational capacity until conditions in the Middle East stabilize. The company is expected to make an official announcement regarding these proposed measures in the near future.