India's national carrier Air India is going through a deep financial crisis, and recent incidents have only added to its woes. First, no bidder showed interest in buying the beleaguered airline. And now, the salaries of over 11,000 permanent employees working for the Maharaja are stuck for the month of May. Reports suggest the cash-strapped airline has failed to release salaries of its employees for the third month in a row. So what's causing the delay? Though it's obvious the airline is struggling to keep up with its finances, the management has not officially communicated the reason behind the inordinate delay to its staff.
"We have still not received our salaries for May. Moreover, the management has not informed us till date as to when it will be disbursed. This is the third month in a row that the airline has delayed the salaries," PTI quoted a source saying.
Usually, the Air India employees get their salaries by 30th or 31st of every month but the March and April salaries of the Air India employees were delayed by seven days. The state-owned lender Bank of Baroda had come to its rescue after the career raised working capital loan from the bank, and released the salaries on May 7. Though no official confirmation has been received so far, an Air India spokesperson told PTI the employees are expected to receive their May salaries by next week.
Considering its mounting losses, Air India has asked the government to restore equity infusion after it failed to find any buyers in its privatisation bid. In 2012, the Congress-led UPA government had approved a turnaround plan under which Air India was to receive a total equity infusion worth Rs 30,231 crore up to 2021. So far, the state-run airline has received more than Rs 26,000 crore under the bailout package.
The centre had approved strategic divestment plan to privatise Air India in June 2017. Under the proposal, the government wanted to sell 76 per cent stake in Air India, 100 per cent in its subsidiary Air India Express, and 50 per cent in its ground handling staff. It had also said that the prospective buyer would have to pare half of its total debt of Rs 54,000 crore. Unfortunately, even those who showed some interest initially -- IndiGo, Jet Airways, and Tata Sons -- backed out citing unfavourable terms of conditions by the government. This is second time in the past two decades that the government had failed to sell stake in Air India.
The government last week said it didn't find any takers for the Maharaja of India as no bids were received for Air India's strategic disinvestment before the deadline for the submission of Expression of Interest (EOI) ended on May 31.