AI to clear salaries of a section of staff in 7 days

Cash-strapped Air India,which has failed to pay salaries of its employees for the last two months,has decided to clear salaries of a section of its staff in a week,said top airline officials.

The salaries of Group C and Group D staff will be cleared in seven days, said an airline executive. These categories cover over 50 per cent of the airlines staff strength and also includes cabin crew. While the airline had paid basic salary to its employees,it had withheld productivity-linked allowance which accounts for almost 50-80 per cent of their total pay packet. The companys annual wage bill amounts to almost Rs 3,000 crore.

Civil Aviation Minister Vayalar Ravi told The Indian Express that talks are on with the finance ministry to infuse further equity into the loss-making entity. So far,the government has pumped in Rs 2,000 crore in two separate tranches over the last two years. The Group of Ministers overseeing Air Indias turnaround had in 2009,given its assent for equity infusion of Rs 5,000 crore over the next three years,linking the financial support to time-bound deliverables. The airline is facing severe cash shortage. The recent strike has made matters worse. Where is the money to pay salaries? said a senior aviation ministry official.

The bankers consortium,approached by the airline for restructuring its Rs 40,000 crore debt,has put several riders. One,the government should provide equity infusion over and above Rs 5,000 crore already committed. Second,government should certify that Air India would retain its privileged status and would have the Right of First Refusal in bilateral air services negotiations. The final report is under the consideration of the Reserve Bank of India,the official added.

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