Air India has deferred annual salary increments for employees by at least one quarter, with CEO and Managing Director Campbell Wilson telling staff at an internal town hall on Friday, May 8, 2026, that the airline must maintain “a relentless focus on costs” in a tough year for global aviation.
Chief Human Resources Officer Ravindra Kumar GP, addressing the same town hall, said that while annual increments would be paused, the airline did not anticipate any layoffs. He confirmed that the carrier would proceed with variable pay payouts for the previous financial year and continue with planned promotions.
Air India met 56% of its financial targets and 76.4% of its overall yearly targets for the year, and employees will receive 76.4% of the variable pay linked to those goals. “We have budgeted to pay it when the environment gets better, but we’re going to withhold it for now,” Wilson said of the salary hikes.
The Tata Group-owned carrier is projected to post losses exceeding Rs 22,000 crore in FY26, sharply higher than the consolidated loss of Rs 10,859 crore in FY25. Wilson cited a combination of external pressures, including the continued closure of Pakistan airspace, broader disruptions across West Asia due to the conflict, a sharp depreciation of the rupee, and a 2.5 to 3 times increase in jet fuel prices compared to earlier levels.
“It is not a great environment to be running an airline,” Wilson said, adding that the aviation sector had absorbed several Black Swan events over the past year. He also acknowledged that FY26 losses came in higher than the airline had budgeted for.
The town hall came a day after the Air India board, chaired by Tata Sons chairman N Chandrasekaran, met at the airline’s Gurugram headquarters to review financial performance, cost management, and succession planning for the next CEO. Wilson asked teams to suspend discretionary spending, renegotiate vendor rates, and defer non-critical expenditures.
Operational metrics, however, have moved in the right direction. Domestic on-time performance rose to 76% in FY26, and the Customer Net Promoter Score improved to 30 in March 2026 from 20 in April 2025 and minus 19 in 2023.
