Air India launches cost-cutting drive and seeks $1.5 billion equity after $2 billion loss

Air India reported a fiscal-year deficit of more than $2 billion and is under regulatory review after a fatal crash in June 2025 that killed 260 people. To combat the financial strain and soaring fuel costs, the carrier is tightening spending controls and has requested about $1.5 billion in fresh equity from its owners, Tata Sons and Singapore Airlines. In a memo, Tewolde announced the formation of a dedicated cross-functional team to hunt for cost-saving opportunities and launched an employee initiative that rewards ideas that reduce expenses or boost revenue.

The airline also continues to grapple with safety and compliance issues, including operating aircraft without valid certifications. Additionally, a ban on using Pakistan’s airspace and disruptions linked to conflicts in the Middle East have compelled longer flight paths, cancellations, and reductions in international routes.