New Delhi: Air India has set up a committee under its new Chief Executive Officer and Managing Director, Tewolde Gebremariam, to identify measures to reduce costs and improve operational efficiency, according to sources cited in the report.

The proposed measures include rationalising certain teams across Air India and Air India Express, as well as relocating office space occupied by Air India Express to reduce lease expenses. The move comes as the airline faces financial pressure following a consolidated loss of Rs 22,238.23 crore in the 2025-26 financial year.

The committee will examine possible ways to strengthen cost discipline across the airline group. Air India’s board of directors is also scheduled to meet on Thursday, when cost-saving measures are expected to be among the issues discussed.

Queries sent to Air India seeking comments on the committee had not received an immediate response, according to the report.

New CEO Focuses on Cost Discipline

Gebremariam formally took charge as Air India’s CEO and managing director on October 1. An aviation veteran from Ethiopian Airlines, he is the second foreign CEO and managing director to head the Indian carrier.

Since taking charge, Gebremariam has highlighted the importance of financial discipline and operational improvements. In a message to employees on September 28, he said cost discipline must become part of Air India’s organisational culture.

He also identified sustainable profitability, safety and operational reliability as key priorities for the airline.

The formation of the cost-saving committee reflects this emphasis on improving the airline’s financial position. By examining internal structures and operating expenses, the management is looking to identify areas where costs could be reduced without losing sight of its wider operational priorities.

Air India and Air India Express Teams May Be Rationalised

One of the measures under consideration is the merger of certain teams across Air India and Air India Express.

According to the sources, the committee will examine whether combining selected teams could help reduce duplication and improve efficiency. The details of which teams may be affected have not been disclosed.

Any such restructuring would form part of a broader review of the airline group’s operating costs. The available information does not specify whether the proposed changes would affect staffing levels or involve any workforce reductions.

The committee is also looking at the possibility of relocating office space currently occupied by Air India Express. The objective would be to reduce lease expenses and manage property-related costs more efficiently.

These proposals remain measures under consideration, rather than confirmed changes already implemented by the airline.

Board Meeting Expected to Discuss Savings

Air India’s board of directors is scheduled to meet on Thursday, with cost-saving measures likely to feature in the discussions, according to the sources.

The meeting comes as the airline seeks to improve its financial performance and strengthen the discipline surrounding operating expenditure.

The committee established under Gebremariam is expected to explore potential opportunities for savings. However, the report does not provide a timeline for the committee’s review or identify a specific savings target.

The board’s discussions could provide further direction on how the airline intends to approach cost reduction and operational efficiency.

Air India had not issued an immediate response to queries seeking comments on the committee, leaving the precise scope of its work and the possible implementation of individual measures unclear.

Employee Ideas to Be Encouraged

Gebremariam has also indicated that Air India intends to encourage employees to contribute ideas that can generate measurable savings and improve efficiency.

In his September 28 message to staff, he announced plans to introduce programmes that reward employees whose suggestions deliver demonstrable cost reductions or operational improvements.

The proposed approach would make cost discipline a broader organisational responsibility rather than limiting it to management decisions.

Employee suggestions could form part of the airline’s efforts to identify practical ways to improve processes and use resources more efficiently. The report, however, does not provide details about the structure of the proposed reward programmes or when they will be introduced.

The focus on employee participation comes alongside the committee’s review of team structures and office-related expenses.

Financial Pressure and Operational Challenges

Air India, jointly owned by Tata Group and Singapore Airlines, recorded a consolidated loss of Rs 22,238.23 crore in FY26. The financial result adds urgency to the airline’s efforts to examine its cost base and work towards sustainable profitability.

The carrier has also been dealing with several operational and external challenges. These include the fatal AI171 accident in June last year, which killed 260 people, as well as geopolitical disruptions, airspace closures, fuel price volatility and other operational issues.

These factors have created a challenging environment for the airline as it works to strengthen its financial and operational performance.

Gebremariam has identified safety and operational reliability alongside profitability as core priorities. The committee’s cost-saving exercise is therefore taking place against a wider backdrop in which the airline must manage expenses while maintaining its operational responsibilities.

Focus on Sustainable Profitability

The formation of the committee signals a renewed focus on cost management under Air India’s new leadership. The proposals under consideration include rationalising selected teams across Air India and Air India Express, reviewing office space arrangements and encouraging employees to suggest practical savings.

The airline’s board is expected to discuss cost-saving steps at its scheduled meeting, although the details and implementation timelines remain unclear.

With Air India reporting a substantial consolidated loss in FY26, the coming period will be important as management evaluates possible changes to its cost structure. The stated priorities of sustainable profitability, safety and operational reliability will remain central to the airline’s efforts to improve performance.