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Air India has deferred annual salary hikes for employees after missing its financial targets for the last financial year, even as Chief Executive Officer Campbell Wilson warned staff to prepare for another difficult year amid rising fuel costs and ongoing geopolitical disruptions.
Addressing employees at a town hall, Wilson said the airline had endured a challenging financial year and had failed to meet its internal loss targets. Air India was not aiming to post a profit during the year, but had instead sought to limit losses. However, the airline ended up losing more than it had initially planned.
Wilson said the airline achieved only around 56% of its financial goals for the year, while overall target achievement stood at roughly 76%. As a result, employees will receive 76.4% of their performance-linked variable pay for the previous financial year.
The airline has budgeted for annual salary increments, but has decided to defer them for now because of the prevailing business environment. Air India plans to review the situation as the year progresses.
At the same time, Wilson assured employees that the airline is not considering layoffs at present despite the financial pressures.
He also highlighted the broader challenges facing the aviation industry, including geopolitical tensions, higher fuel prices and airspace disruptions. According to Wilson, rerouting due to regional tensions has significantly increased operating costs for airlines.
Also Read: Exclusive | Airlines ask government for tax relief as West Asia crisis and high fuel prices squeeze profits
Flights between India and the UK are now taking nearly 12 hours instead of around eight hours earlier because of route diversions, leading to higher fuel consumption at a time when jet fuel prices have already surged sharply since the escalation of the West Asia conflict.
Wilson warned employees that the year ahead could remain extremely difficult unless oil prices moderate, consumer confidence improves and the situation around the Strait of Hormuz stabilises.
Addressing employees at a town hall, Wilson said the airline had endured a challenging financial year and had failed to meet its internal loss targets. Air India was not aiming to post a profit during the year, but had instead sought to limit losses. However, the airline ended up losing more than it had initially planned.
Wilson said the airline achieved only around 56% of its financial goals for the year, while overall target achievement stood at roughly 76%. As a result, employees will receive 76.4% of their performance-linked variable pay for the previous financial year.
The airline has budgeted for annual salary increments, but has decided to defer them for now because of the prevailing business environment. Air India plans to review the situation as the year progresses.
At the same time, Wilson assured employees that the airline is not considering layoffs at present despite the financial pressures.
He also highlighted the broader challenges facing the aviation industry, including geopolitical tensions, higher fuel prices and airspace disruptions. According to Wilson, rerouting due to regional tensions has significantly increased operating costs for airlines.
Also Read: Exclusive | Airlines ask government for tax relief as West Asia crisis and high fuel prices squeeze profits
Flights between India and the UK are now taking nearly 12 hours instead of around eight hours earlier because of route diversions, leading to higher fuel consumption at a time when jet fuel prices have already surged sharply since the escalation of the West Asia conflict.
Wilson warned employees that the year ahead could remain extremely difficult unless oil prices moderate, consumer confidence improves and the situation around the Strait of Hormuz stabilises.
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