New Delhi - India's flag carrier Air India will defer June salaries to its 31,000 employees by 15 days due to a liquidity crunch, news reports said Monday. All department heads at the airline received an e-mail Sunday stating salaries would be delayed, the Economic Times newspaper reported.
Air India spokesman Jitender Bhargava said the salaries would be paid on July 15 instead of July 1.
The airline has submitted a proposal to the federal Ministry of Aviation asking for a bail-out package, the spokesman added.
The government was likely to approve a package for the airline soon, Minister for Civil Aviation Praful Patel said on the NDTV news channel.
However, he added that it was likely to be much less than the 140 billion rupees (about 2.92 billion dollars) sought by National Aviation Company Limited (NACIL), the state-run entity which owns Air India.
NACIL was formed by combining domestic carrier Indian Airlines and flag carrier Air India in 2007. The company has placed orders for aircraft worth 450 billion rupees with Boeing and Airbus.
Air India's losses in the 2008-2009 fiscal year were over 40 billion rupees. It accumulated losses of 2.2 billion rupees in the 2007-2008 fiscal year.
Analysts say the huge losses are due to overstaffing, poor planning and management combined with rising fuel costs over the past decade and the current economic slowdown.
Plans to privatize the state-run airline have been in the pipeline since 2001 but have run into opposition from unions.
Soon after taking over as civil aviation minister for the second term, Patel recently said the government would consider an initial public offering (IPO) for the state-owned carrier Air India in the near future. The IPO would bring in much-needed equity to the loss-making company and make it more accountable, Patel said.
Patel set no date for the IPO and said much would depend on the state of the share markets.
