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Our Bureau

New Delhi, June 14 The financial woes affecting the airline industry have now reached the employees of the State-owned Air India. The carrier is to delay payment of salaries and productivity linked incentives (PLI) for June to all its 31,500 employees by about two weeks. The airline’s monthly wages and PLI bill comes to around Rs 350 crore.

Confirming the development, a senior Air India official said this was probably the first time in the airline’s history that the employees’ salaries will not be paid on time. Generally, Air India pays its employees on the last day of each month, but this time they will be paid June’s salary on July 15.

“The industry as a whole is facing challenging times. Air India is not alone. Look at what is happening to the other domestic airlines also. We have already approached the Government for help. Hopefully the life line should not be too long in coming,” a senior official said. The airline’s losses for the last fiscal are estimated at over Rs 4,000 crore.

Air India, like many other airlines globally, has been affected by low yields and dwindling passenger traffic. The airline is said to be in immediate need of funds to pay interest on loans for aircraft and also the instalment for the pre-delivery payment of some new aircraft it will be inducting into its fleet.

In the interim Budget 2009-10, the airline had shown a non-plan expenditure of Rs 6,500 crore mainly on account of payment for aircraft, and to engine manufacturers for the 27 aircraft, including 21 Airbus A-320 family aircraft and six Boeing 777 aircraft that it will be inducting till May next year.

The airline is said to be seeking Rs 14,000 crore from the Government, including Rs 7,000 crore as soft loan, Rs 2,000 crore as grant and an equity infusion of Rs 5,000 crore. The current equity of the airline stands at Rs 145 crore.

The airline Chairman, Mr Arvind Jadhav, has, however, consistently denied seeking such a high amount.

“The amount that we require from the Government is being worked out. Nothing has yet been finalised,” Mr Jadhav said.

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