AI defers March salary to April 7

Facing a severe cash crunch, Air India had deferred payment of salaries for the month of March by a week, to April 7, instead of the usual practice of paying it within the month, airline sources said today.

This is the second time in the recent past that the national carrier had to defer salary payments. In June last year, it had postponed salary payments by 15 days due to non-availability of funds.

The cash crunch caused by ongoing recession in the aviation industry and other committed payments, including interests on aircraft delivered, had led to the decision, the source added.

The National Aviation Company of India has been incurring losses since its inception, with a Rs 2,226-crore loss in 2007-08 and Rs 5,500-crore loss in 2008-09.

The cash-strapped carrier already has over Rs 16,000 crore working capital borrowings on its balance sheet, coupled with around Rs 7,200 crore expected losses last financial year.