Liquidity problems force AI to delay June salary by 15 days

Mumbai/Delhi: The National Aviation Company of India (Nacil), the company that operates Air India, has decided to defer the payment of June salary to its 31,000 employees by 15 days due to severe liquidity crunch.
Air India top officials — general manager levels and department heads — have got an email, stating that the salary will be delayed by 15 days. The e-mail will be forwarded by department heads to their colleagues this week, said a senior official.
An AI spokesperson, in a text message on Sunday evening, confirmed to ET that the June salary, due at the end of the month, will be paid on July 15. The company had submitted a proposal to the ministry recently asking for a bailout package, the spokesperson added.
It was further learnt that Air India top officials were asked to meet the civil aviation ministry before the budget to work out the final package the government will be sanctioning for Nacil.
Last week, Air India, had tabled a blueprint to the aviation ministry on how it will utilise the Rs 14,000-crore bailout package, if it’s granted.
Another senior AI official said that Rs 14,000 crore package is necessary for the national carrier to run operations smoothly.
“We are not yet sure what the civil aviation ministry will finally approve in the budget,” the official said on condition of anonymity. When asked about any likely layoffs, he said there’s no layoffs plan as of now.
Incidentally, the decision on salary delay came after Air India CMD Arvind Jhadhav said that Nacil may have to take drastic steps to come out of the current situation. “We are trying to do a reality check, every group has to adopt some cost saving and revenue generation programmes,” Mr Jhadhav added.
Industry trackers say AI has not been in the best of health and the government bailout is critical. The cost of acquiring 144 aircraft has shot up from Rs 45,000 crore to Rs 50,000 crore on account of currency fluctuations.
15/06/09 Economic Times

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Categories: NACIL Jun 2009