Cash-strapped AI delays staff salaries
Salaries of cash-strapped Air India’s employees will continue to be delayed for many more months to come on account of the national carrier's rising interest burden and overdues to oil companies. “Our daily interest outgo on loans has increased from Rs 6.4 crore to Rs 7 crore in the last few months.
Moreover, we pay Rs 12.5 crore daily to oil companies as they have put us on cash and carry basis,” a senior Air India official said. The airline's 40,000-odd employees have been getting their salaries by the 7th or 8th of the next month since July 2010.
They got their salaries for January on February 14 and that for February on March 8. But many of them are concerned whether they will get salaries the next month at all. The airline's monthly salary bill amounted to over . 150 crore. Explaining the difficult situation, civil aviation minister Vayalar Ravi said in the Lok Sabha on Wednesday that Air India earns Rs 36 crore a day from its operations, while it spends about Rs 57 crore. The overdues to oil PSUs have soared to over Rs 2,280 crore as on February this year and they are not yielding to any concessions , the minister said.
“This means that by month-end there isn't enough cash left for salaries and revenues earned in the next 10 days of the new month are ploughed back as the previous month's salaries,” said a senior AI official. Many of Air India's vendors have refused to send fresh supplies as the airline is unable to settle its old dues. In February , the airline had taken a loan of Rs 600 crore from Corporation Bank and that of Rs 200 crore from Indian Overseas Bank in March.
Both the loans were taken for settling vendors' and fuel bills, in addition to payment of salaries. According to the airline official, reve0nues can be increased by enhancing aircraft utilisation from eight hours per day to 11 hours. "But for that we need to recruit more cabin crew and how can we pay more people if we can't pay the existing employees? We are in a catch-22 situation .”
Source : ET
They got their salaries for January on February 14 and that for February on March 8. But many of them are concerned whether they will get salaries the next month at all. The airline's monthly salary bill amounted to over . 150 crore. Explaining the difficult situation, civil aviation minister Vayalar Ravi said in the Lok Sabha on Wednesday that Air India earns Rs 36 crore a day from its operations, while it spends about Rs 57 crore. The overdues to oil PSUs have soared to over Rs 2,280 crore as on February this year and they are not yielding to any concessions , the minister said.
“This means that by month-end there isn't enough cash left for salaries and revenues earned in the next 10 days of the new month are ploughed back as the previous month's salaries,” said a senior AI official. Many of Air India's vendors have refused to send fresh supplies as the airline is unable to settle its old dues. In February , the airline had taken a loan of Rs 600 crore from Corporation Bank and that of Rs 200 crore from Indian Overseas Bank in March.
Both the loans were taken for settling vendors' and fuel bills, in addition to payment of salaries. According to the airline official, reve0nues can be increased by enhancing aircraft utilisation from eight hours per day to 11 hours. "But for that we need to recruit more cabin crew and how can we pay more people if we can't pay the existing employees? We are in a catch-22 situation .”
Source : ET
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