Air India is preparing to introduce a performance-linked stock option plan for employees, as parent Tata Group accelerates efforts to turn around the loss-making airline.
According to reports, the proposed Performance Stock Option Plan (PSOP) 2026 will allow eligible employees—including pilots, engineers and senior management—to purchase shares at a price ranging between the Rs 4 face value and the prevailing market value at the time of grant.
The scheme, approved at an extraordinary general meeting in February, is designed to align employee performance with the airline’s broader growth and profitability targets, while strengthening retention and attraction of talent across the group.
“The objective of PSOP 2026 is to reward the eligible employees of Air India and its subsidiaries… and to motivate them to contribute to the growth and profitability of the company,” the resolution stated.
The airline is expected to issue around 2.27 billion stock options—equivalent to 0.25 per cent of its total share capital—as new shares for eligible staff. Singapore Airlines, which holds a 25.1 per cent stake in the carrier, has been granted pre-emptive rights to maintain its shareholding.
The options will vest over a period of one to five years, reinforcing a longer-term commitment from employees. Final eligibility, allocation and pricing will be determined by the airline’s nomination and remuneration committee.
The structure is also tied to internal performance benchmarks, with employees set to receive only half their allocated shares if the airline achieves less than 85 per cent of its targets—underscoring a sharper focus on productivity and efficiency.
The development comes amid leadership changes at the carrier, with CEO Campbell Wilson stepping down in March. He is expected to remain in the role until a successor is appointed.
Air India CEO Campbell Wilson resigns ahead of term as challenges continue
Air India joins a growing list of Indian carriers leveraging employee stock ownership schemes, with IndiGo, SpiceJet and privately held Akasa Air already offering similar incentives.
The move builds on earlier efforts following the airline’s return to private ownership in 2022, when shares were allocated to nearly 8,000 employees under an employee benefit scheme.
In Australia, Qantas has employee share schemes, but these are typically free or discounted share grants, not options employees buy into.
In 2025, the airline gave around 25,000 staff $1,000 worth of shares as part of a broad reward program. It was similar to a scheme announced earlier that year by Virgin to give employees $3,000 in share rights each.
