Air India struggles to pay wages
23 / 02 / 2009
AIR India may not be able to pay staff wages or fulfil lease commitments due to financial difficulties.
In a meeting held in Mubai with the civil aviation secretary, N Madhavan Nambiar, Air India officials asked for a soft loan of Rs 27.5 billion (US$500 million) and an equity infusion of Rs 1.2 billion ($24 million) “to strengthen the balance sheet and infuse confidence among institutional lenders to support the aircraft acquisition program”.
Vendors are already putting the airline on credit hold following the state carrier’s loss of revenue from the steep decline in demand and having $8.1 billion tied up in funds for the purchase of 30 aircraft.
The airline had been hoping for a large allocation of government funds in last week’s interim budget but very little was actually assigned to it.