Air India faces crisis, incapable of paying salaries after October

The Airline’s funds will soon be depleted, and it has still to repay debt worth Rs 9000 crore.


Air India will soon run out of funds to pay salaries to its employees beyond October. Not only are the salaries being delayed regularly, the Airline is facing debt repayments amounting to Rs 9000 crore. Also, it is reported that the Government plans to sell its 100 per cent stake in the carrier.

The national carrier had been given sovereign guarantees worth Rs 7,000 crore, of which it has about Rs 2,500 crore left. This will soon be all used up to clear salary dues and repay debts of vendors, including oil companies and airport operators in the next few months. Air India requires more than Rs 300 crore to pay salaries every month. Even the monthly salary disbursement is being delayed regularly.

While the Government is well aware of the financial crisis that Air India is facing, the Civil Aviation Ministry has not demanded any additional funding for the Airline in the budget that is to be presented on 5 July.

Air India Asset Holdings, which holds some of the Airline’s debt and assets, was allocated Rs 3,900 crore in the interim budget in the previous and current financial years to take care of debts. Out of the total debt of Rs 58,000 crore, Air India Asset Holdings had borne Rs 29,464 crore.

In the current financial year, however, Air India still has to repay debt worth Rs 9,000 crore. Although it had approached the Government for help, a positive response is not likely as the Government is planning to sell its 100 per cent stake in Airline.

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