Air India Has No Money To Pay Salaries After October; Govt. Says Committed To Privatisation
Stare-run airlines Air India is in deep trouble, once again. As per reports coming in, Air India has no money to pay the salaries after October 2019.
Meanwhile, Govt. has once again said that they are determined to privatize Air India, and steps are being taken in that direction.
Air India Has No Money To Pay Salaries After October
Govt of India had earlier provided Air India with sovereign guarantees worth Rs 7000 crore to manage operations and pay the salaries to employees.
Out of this fund, only Rs 2500 crore is now remaining, and this will be finished soon.
They need to pay vendors such as oil companies and airport operators, and the salaries every month, which will consume this remaining fund by October.
Rs 300 crore is the average monthly spend for Air India in paying salaries to their 20,000 odd employees.
In fact, an unnamed Air India employee said that they received their May salary 10 days late, and this is causing some concern to all the employees.
Why This Is A Grim Situation?
This situation is grim, because Air India also needs to start repaying their debt of Rs 9000 crore, and the employees are wondering how will they do this, if they don’t even have money to pay the salaries.
Air India has total debts of Rs 59,000 crore, and repayment was expected to start from this fiscal year.
On top of that, Civil Aviation Ministry has refused to ask for any additional money during this current Budget session, and this adds to the confusion.
A senior official from the Ministry of Aviation said, “It’s the same as the demands made in the interim budget and we are not seeking anything extra for Air India,”
100% Privatisation Of Air India Soon
Amidst these financial concerns, Govt. of India has once again repeated their determination to privatize Air India, and divest their 100% share in the beleaguered Govt. organization.
Civil aviation Minister Hardeep Singh Puri, during the Question Hour in Rajya Sabha, said that the Govt. is looking to make Air India more “viable, revive it and then disinvest it”.
Govt. had attempted to sell off 79% of their equity to private players last year, but this back-fired, as none of the private airlines or investors were interested in this deal.
Now, to lure more investors, Govt. has decided to wave-off Rs 29,000 crore debt out of Rs 59,000 crore debt, and make less of the burden on Air India.
We will keep you updated, as more details come in.