Cash-Strapped Air India Gets Rs 1000 Crore Lifeline From Small Savings Fund

Team Latestly
Air India pilots rejected the airline’s decision to revise their salaries to bring them on par with pilots operating other aircraft pilots. The revised salary structure would slash the salaries of wide-body aircraft pilots by 25 percent.

New Delhi, October 18: Debt-ridden national carrier Air India has been provided with Rs 1000 crore from the National Small Savings Fund by the government. With Rs 1000 crore, the Air India has so far raised Rs 3000 crore as loan. The airline is expected to raise another Rs 500 crore as a loan next week by availing of its unused sovereign guarantee.

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Speaking to a leading daily, an official of the Air India said the government has given the airline sovereign guarantee to raise Rs 3,500 crore as loan. The financial position is now slightly better after the equity infusion, he said. The official added the remaining Rs 500 crore loan would be raised by next week. The development comes as a small relief to the airline. Air India Cabin Crew to Lose Allowances If They Turn Up Late For Flight.

Air India owes about Rs 4,200 crore to oil companies as dues and and current outstanding. Earlier this month, Union Minister of State for Aviation Jayant Sinha said the government was working on a revival package with four elements, including financial assistance for the airline. Air India's annual fuel cost is Rs 8,500 crore. Air India on Its Way to Become Globally Competitive Airline: Jayant Sinha.

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Sinha said the package includes financial assistance to support the airline, undertaking of a series of reforms to ensure that it is a professionally managed company, strategy to make it successful and competitive and also series of measures to improve conditions for the workforce.

On August 7, Parliament had approved the additional gross additional expenditure of Rs 980 crore for equity infusion into the heavily indebted airline. The airline has taken several measures to cut expenses. In a recent directive, the airline said it will suspend some allowances given to its cabin crew if they turn up late for flights.