Financial crunch forces Air India to defer salary payment

Current month salaries of 30,000 employees delayed by a fortnight

For the first time since the losses hit the national carrier Air India, the payment of salaries for the current month of about 30,000 employees will be delayed by a fortnight.

Confirming this, an Air India spokesperson said, "The salaries of June will be paid on July 15 due to the resource crunch that the company is facing."

The payment of productivity-linked incentive (PLI) has also been delayed by 15 days, according to a circular issued by Air India management.

Air India's losses for the last financial year are estimated at around Rs 4,000 crore, up from Rs 2,226 crore in the previous fiscal.

Reports say the national carrier was planning to seek Rs 5,000 crore as additional equity, Rs 7,000 crore as a soft loan payable after five years at a 5 per cent interest rate, and a grant of Rs 2,000 crore.

However, top Air India officials have denied the figures, but said they are working on similar lines.

Maintaining that the financial crisis was foreseen last year, industry sources said the acute situation could have been avoided had Air India delayed the ongoing deliveries of aircraft, like its competitors Jet Airways and Kingfisher Airlines did.