Air India weighs returning two office towers as cost-saving drive widens

Tata Group-promoted Air India is considering returning two towers at its corporate office park to reduce rental expenditure, while developing a work-from-home policy for employees affected by the proposed move, sources told businessline. At present, Air India is headquartered at the Vatika One on One campus in Gurugram, where four towers are exclusively used by the airline group.

These measures form part of the airline’s wider cost-saving programme, which includes rationalising staff-on-duty (SoD) travel expenditure and consolidating key departments. According to sources, the proposed reduction in office space will help lower recurring rental costs, with work arrangements being reviewed to accommodate affected employees.

services cut

Besides, the airline is rationalising its international network as it seeks to contain expenditure in a “difficult operating environment”. According to sources, Air India has stopped services to Copenhagen and Vienna and reduced frequencies to London Gatwick, Birmingham and San Francisco.

Furthermore, the office and network measures extend the airline’s efforts to reduce costs across corporate functions and flight operations. businessline had earlier reported that Air India was examining consolidation of identified departments across Air India and Air India Express, including human resources, finance, information technology and engineering, to reduce duplication and expenditure.

Subsequently, the airline’s board had ratified the consolidation plan and additional cost-control measures, empowering the chief executive to take immediate steps to reduce expenditure and wastage. The latest measures come amid pressure from elevated fuel prices, foreign exchange fluctuations and airspace restrictions.

Consequently, Air India Group’s consolidated net loss widened to over ₹6,000 crore in the first quarter of FY27, against more than ₹3,000 crore a year earlier. The group ended FY26 with a consolidated loss exceeding ₹22,000 crore, compared with nearly ₹11,000 crore in the preceding fiscal.

‘main priority’

Meanwhile, speaking at the Aviation India and South Asia 2026 summit earlier this week, Air India Chief Executive Officer Tewolde Gebremariam said bringing down costs was an immediate priority. He said the airline’s cost per available seat kilometre exceeded its revenue per available seat kilometre, requiring correction of the imbalance.

A cross-functional team was examining expenditure across the business, while Air India and Air India Express were working towards greater efficiencies through shared corporate functions and other synergies, he said. Nevertheless, Gebremariam maintained that both airlines would continue growing, with potentially greater opportunities in the full-service, wide-body long-haul business.