Loss-making Air India has set up a multi-disciplinary team to identify cost-saving opportunities, with the new CEO Tewolde Gebremariam urging the staff to embed a mindset of frugality and accountability in all their works.

Mr. Gebremariam, who officially took over the reins as CEO and MD on October 1, told the employees this week that every rupee saved creates an opportunity to reinvest in areas that matter the most, including operations and customer experience.

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The airline will also be launching 'PRABHAV - The Value Creator Award', an initiative to gather cost-reduction ideas from the staff, and those providing ideas that can be implemented will be rewarded.

"A multidisciplinary, cross-functional Cost Savings Team has been established on full-time basis to identify cost-saving opportunities across the organisation," he said in a message to the staff on October 12.

The team will systematically review all expenditure and identify cost-saving opportunities across functions, he said and mentioned that the airline was navigating an exceptionally challenging operating environment.

"Ongoing airspace closures, the conflict in the Middle East and its resulting operational disruptions, and persistently high jet fuel costs continue to place significant pressure on airlines across the industry," he said.

Air India, which is jointly owned by Tata Group and Singapore Airlines, recorded a consolidated loss of Rs 22,238.23 crore for 2025-26 financial year.

According to Mr. Gebremariam, 'PRABHAV' will invite ideas from employees that reduce costs through smarter ways of working, improved utilisation, improved processes, contract optimisation and/or renegotiation, insourcing of outsourced activities and optimal use of resources.

Also, the ideas can be on cost effective and efficient procurement of goods and services and waste reduction, questioning the status quo or maximise revenue through new opportunities and deriving greater value from the existing products, services and capabilities, he added.

The airline has also made changes to the approval matrix for SOD (Staff On Duty).

From October 1, all approvals will now be routed through the HOD, CXO, and CEO, ensuring greater rigour, transparency, and alignment in decision-making across the organisation, Mr. Gebremariam said in the message.

Air India's consolidated loss widened to Rs 22,238.23 crore in the fiscal year ended March 2026 from Rs 10,858.83 crore a year ago amid multiple headwinds.

During the same period, total income declined to Rs 71,869.94 crore from Rs 78,635.61 crore, according to regulatory filings. The consolidated figures include financials of Air India Express.

Stressing the importance of being cost consciousness, the CEO said that alongside operational excellence, "we need to embed a mindset of frugality, accountability, and thoughtful decision-making in everything that they do".

"By embracing a culture of accountability, prudent spending, and operational excellence, each of us can play a meaningful role in shaping Air India's long-term success," he said.

He also said that cost savings cannot be driven by a single team and requires the active participation and commitment of every employee.

An Ethiopian Airlines veteran, Mr. Gebremariam is the second foreigner to head Air India, which was acquired by the Tata Group from the government in January 2022.