Friday, June 08, 2018

Government comes to Air India's 'rescue' as airline delays salaries in May

New Delhi: Debt-laden Air India doesn’t have working capital or adequate finances to run to run its day-to-day operations and even pay its employees. Air India is seeking government help to bail it out. The ailing national carrier has invited proposals for government-guarantee backed short-term loans, totalling Rs 1,000 crore to meet urgent working capital requirements. The government has, however, agreed to give the guarantee to Air India to get Rs 1,000 crore loan for its working capital from banks, sources told ETNow.The bid document mentions that the Rs 1,000 crore loan will be drawn in June in one or more tranches. The airline has asked lenders to submit their financial bids by June 13. However, the loss-making airline borrowed around Rs 6,250 crore from various lenders between September last year and January this year for working capital requirements and other needs.To be noted, Air India employees are yet to get their salary for the month of May. The national carrier has delayed payment of salaries for the third consecutive month. The airline’s management is yet to convey the employees about reasons for the delay. The ailing carrier has over 21,000 staff, including more than 11,000 permanent staff on its payrolls.Air India employees generally get salary by the 30th or the 31st of every month. The government’s move to privatise the state-run carrier by disinvesting 76 per cent equity came a cropper. Air India failed to attract a single expression of interest as the deadline ended last week.
08/06/18 ET Now News