Govt seeks 6-month credit to pay ailing AI's fuel bill

New Delhi: The aviation ministry has sought a six-month credit for cash-strapped Air India from the oil ministry to pay for its aviation turbine fuel (ATF) bill. It has also sought the oil ministry’s intervention in asking oil marketing companies (OMC) to give credit to AI, whose total due in March-end was Rs 542 crore.
Meanwhile, the finance ministry is also learnt to be considering if ATF should be brought in declared goods category so that it attracts a uniform 4% sales tax across the country as the current rates is as high as 34% in some states. Airlines say that this move alone will go a long way in making their business viable.
This breathing period is among the life saving steps both AI and the ministry are taking for the Maharaja. According to sources, the grossly overstaffed airline — that has 31,000 employees and almost 20,000 people doing outsourced jobs — is going to put a freeze on hiring for non-essential posts for next three years during which it expects 5,000 staffers to retire. At present, the annual wage bill of Rs 3,100 crore accounts for 18% of its operating expenses.
17/07/09 Times of India

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Categories: NACIL Jul 2009