Pay to Air India employees under a cloud

New Delhi: Clouds of uncertainty continue to hover over the salaries of Air India employees. A huge debt burden and strained finances have forced the national carrier to delay payments for the second consecutive month. Its employees, totalling 31,000, have not yet received salaries for January, which normally come by the last day of every month.
“Last month, Air India paid the salaries by January 7, but the payment for this month seems unlikely to come by then. The airline does not have money to pay salaries, as the banks are reluctant to increase working capital loans,” said a senior civil aviation ministry official, who did not want to be identified.
The official explained that out of the Rs 22 crore Air India earns every day, Rs 13.5 crore go to the oil companies and Rs 8 crore to the airport operator and ground handlers and spare parts companies, leaving the airline with only Rs 50 lakh a day. This translates into only Rs 15 crore a month. The monthly wage bill of the airline is about Rs 250 crore.
The carrier, with accumulated losses of over Rs 15,000 crore, wants to freeze pay and promotions for its employees for three years. It has an annual wage bill of Rs 3,100 crore and will see 2,600 employees retire by 2014.
The oil companies put Air India’s oil requirements on cash and carry after it defaulted on payments.
06/02/11 Mihir Mishra/Business Standard

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Categories: Air India Feb 2011