After Jet Airways, Air India is on the Verge Of Bankruptcy

Jul 03 2019 03:58 PM
After Jet Airways, Air India is on  the Verge Of Bankruptcy

Air India will not have enough money to pay its employees beyond the month of October. According to a report, the airline currently has Rs 2,500 crore left, but their monthly salary itself is Rs 300 crore. Now, the information that is emerging is that Air India will not be in a position to pay salaries to its employees from October this year. The airline takes 10 days or more after the due date to pay monthly salaries to its employees. The average payment on the basis of salary is about Rs. 300 crore.

Apart from the salary, the airline also has to complete the loan repayment and according to sources, the company will not be able to make these payments after October.

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Meanwhile, the government is keen to save its entire 100% stake in the carrier if there is a suitor. Despite several efforts, it was very difficult to find that moneylender. The NDA government had offered life support to the airline during its tenure last year by providing a sovereign guarantee of Rs 7,000 crore. When the final report is made, the airline is in possession of Rs.2,500 crore out of that amount. It is expected to run till October. Operating the airline means opening up huge sums on a daily basis for heads like fuel suppliers and catering companies, in addition to fixed monthly outflows that include statutory dues such as salaries.

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According to a report, these Rs 2,500 crore will be used to pay salaries for a few months along with outstanding dues to vendors including oil companies and operators of airports. Further, a senior official of the ministry said that he is not asking for additional funds for Air India in the forthcoming Budget and the demands remain in the Interim Budget. In the interim budget, Air India Asset Holdings Limited was allocated Rs 3,900 crore for service loans for the previous and current financial years. Air India Asset Holdings, which holds some assets as well as loans, had taken Rs 29,464 crore out of Air India's total loan of Rs 58,000 crore.

The government is working on a plan to split its 100 per cent stake in the airline.

 

 

 

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