Air India had failed to pay to its over 20,000 employees on time for most of the months last year. Like other public sector enterprises, the airline is supposed to pay the salaries on the last day of the month. "Air India has not paid the December salary to its entire staff till today (Jan 7). Worst, there is no word on the date of payment," an airline official said.
An Air India spokesperson said...
the salary payment is under "process," without offering a timeline for the "process" to be completed.
Air India's union representing narrow-body pilots had last month claimed that a majority of its members were defaulting on their bank loans and other financial commitments due to the salary delays.
The national carrier is staying afloat on a Rs 30,0231 crore bailout package extended by the previous UPA government. The 10-year financial succor began in 2012.
The Modi government has already taken lawmakers' approval for equity infusion worth Rs 2,345 crore into the struggling carrier and another Rs 1,300 crore for Air India Asset Holding, a special purpose vehicle (SPV).
As the attempt to sell the carrier came a cropper last May, government is now working on many initiatives, including hiving off a significant chunk of over the Rs 55,000-crore debt into an SPV to turn-around the ailing airline.
For years the airline has been making losses. However, Air India's net loss declined to Rs 5,337 crore in FY18 from the previous fiscal when it had a higher loss of Rs 6,281 crore, as per the latest Public Enterprises Survey 2017-18.
The carrier is estimated to have a debt burden of over Rs 55,000 crore and about Rs 29,000 crore may be transferred into the SPV. Earlier, the national carrier borrowed Rs 1,000 crore each—for six months in October and for four-and-a-half months in November—at an interest rate of 8.5 percent a year. The airline, saddled with more than Rs 54,000-crore debt, is on a government bailout.
In November last year, the government sought Parliament’s approval for an equity infusion of Rs 2,345 crore in the airline under its turnaround plan, ruling out an immediate revival of its plan to sell the ailing carrier. Air India is likely to receive a total of Rs 3,000 crore in the financial year ending March 2019 from the NSSF—a pool of household investments in state-backed small savings schemes.
Air India is in a difficult financial position and is availing loans to repay debt and for working capital needs, and any entity in distress will like to avail funds at a cheaper rate. The carrier has a good credit history as it has never defaulted on any of its loans.
The debt-laden carrier had issued a tender notice on 10 December inviting bids from “government entities 2018 only for sale of lease hold rights of the land and its iconic AI building at Nariman Point, Mumbai.” The deadline for submitting the sealed bids ended at 2.30 pm on 31 December
The national carrier had collected Rs291 crore as lease rental from the property between FY13 and January 2018.
According to Air India’s audited accounts, the airline’s total losses stood at Rs 47,145.62 crore in 2016-17. The government had in May said that Air India has mopped up Rs543.03 crore from monetisation of its assets in prime locations, such as Mumbai and Chennai. The government had in June started discussions for sale of the iconic tower to Jawahar Lal Nehru Port Trust (JNPT) as part of Air India’s asset monetisation plans after the government’s efforts to partially privatise Air India failed to take off.
With over Rs55000 crore debt on its books, Air India management has been trying to pare burden by monetising non-core real estate properties.