After Fourth Delay in 2018, Air India Disburses July Salaries

File image of an Air India flight. 

(Photo: iStock)

Days after it was revealed that debt-laden national airline Air India had yet to pay July salaries for its staff, the management on Tuesday, 14 August, announced that the salaries had been disbursed.

This was already the fourth time this year that salaries have been delayed. There were delays in payments in the consecutive months of March, April, May and June.

Air India has more than 11,000 permanent staff. Generally, the airline disburses salaries by 30th or 31st of every month.

The delay in salary payments also comes against the backdrop of the government seeking Parliament’s nod for Rs 980 crore as supplementary grants for equity infusion into the airline.

On 26 July, Minister of State for Civil Aviation Jayant Sinha told the Lok Sabha that there was a short delay in the payment of salaries for May and that the same was paid subsequently.

Salaries have been paid to all employees, including the salary for the month of June 2018, which was paid on 2 July 2018.

Jayant Sinha, Minister of State for Civil Aviation

Last month, the Civil Aviation Ministry said that Air India has received Rs 27,195.21 crore worth equity infusion under the Turn Around Plan (TAP) and the Financial Restructuring Plan (FRP) approved back in 2012.

After the carrier defaulted on payment of employees' salary in May this year, one of its pilots' unions had urged the management to ensure that the situation is not repeated in the future.

"We request you to make sure that the present situation is not repeated in the future and we look forward to having a conducive atmosphere for the turnaround," it said in a letter to the management on 11 June.

In the current fiscal, the State-owned airline received an equity infusion of Rs 650 crore up to June. TAP and a Financial Restructuring Plan (FRP) were approved for Air India by the previous UPA regime in 2012.

All government guaranteed loans and interests thereon are being paid by the government by way of equity infusion into the airline.

Under the FRP, high cost of working capital loans have been converted into long term debt carrying lesser rates of interest so as to reduce the financial burden on Air India.

"The TAP/ FRP includes budgetary support amounting to Rs 30,231 crore spread over 10 years i.e. up to FY 2020-21 and also equity support for the payment of principal/ interest of the non-convertible debentures.

"Air India has received an equity infusion of Rs 27,195.21 crore till date," Sinha told the Lok Sabha last month.