Air India Initiates Internal Transformation Drive to Combat Rising Operational Costs
New Delhi: In a decisive move to steer the airline toward long-term financial stability, Air India CEO Tewolde Gebremariam has announced a rigorous, company-wide cost-optimization program. Amid mounting financial pressures caused by persistent geopolitical instability and volatile fuel markets, the Tata Group-owned carrier is aiming to overhaul its operational culture to prioritize frugality and organizational efficiency.
The initiative comes at a time when the aviation industry faces significant headwinds. Airspace closures, persistent disruptions linked to the conflict in the Middle East, and the stubbornly high price of aviation turbine fuel (ATF) have placed immense strain on the group’s bottom line. In an internal memo to staff, Gebremariam emphasized that these external pressures necessitate a shift toward heightened cost-consciousness and collective accountability.
The ‘One Air India’ Strategy
As part of its restructuring efforts, the airline is accelerating the integration of Air India and Air India Express. A core component of this strategy involves merging several redundant departments to eliminate operational silos. To oversee this transformation, the leadership is establishing a full-time, cross-functional “One Air India” team. This task force is charged with conducting a systematic audit of expenditures across all departments to identify inefficiencies and unlock potential savings.
“Cost savings cannot be driven by a single team or function alone; it requires the active participation and commitment of every employee,” Gebremariam noted in his communication, urging the workforce to cooperate fully with the integration team.
To bolster financial governance, the airline has also tightened its internal approval procedures. Effective October 1, a newly revised Schedule of Delegation (SOD) approval matrix has been implemented. Under these new guidelines, all significant financial approvals must move through a structured hierarchy, involving the Head of Department (HOD), the Chief Executive Officer (CXO), and the CEO, ensuring tighter control over capital outflow.
Incentivizing Innovation: The PRABHAV Award
Beyond top-down mandates, Air India is looking to its employees to uncover grassroots opportunities for improvement. The carrier has officially launched “PRABHAV-The Value Creator Award,” an initiative designed to crowdsource innovative ideas for revenue maximization and waste reduction.
The award is aimed at identifying smarter workflows, improved resource management, and optimized contract negotiations. The company is particularly interested in suggestions that move outsourced activities back in-house and improve procurement efficiency.
Management believes that even incremental changes, when applied across a large, complex organization, can result in significant fiscal benefits. By rewarding employees who contribute actionable solutions, the airline hopes to foster an environment where staff members at every level are empowered to think like business owners.
“Every rupee we save creates an opportunity to reinvest in areas that matter most,” Gebremariam stated. Whether directed toward upgrading customer experiences, enhancing fleet operations, or bolstering the airline’s infrastructure, the goal of PRABHAV is to transform small, internal improvements into a stronger foundation for the group’s future growth. Through this blend of centralized fiscal oversight and employee-led innovation, Air India aims to navigate the current turbulence and emerge as a more resilient, lean, and competitive aviation entity.
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