Air India may unable to pay employee salaries after October: Report

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Air India doesn't have sufficient funds to pay salaries beyond October as it faces upcoming debt repayments, as per a report by Economic Times.

The airline needs over Rs 300 crore per month for its salary payments. The paper quoted an official as saying the budget is not expected to have additional funds beyond the Rs 3,900 crore allocated for the airline in the interim Budget.

The airline had sought government aid to repay Rs 9,000 crore worth of debt this financial year. The government plans to sell its 100 percent stake in the airline and will only step in to divest as per the daily.

The government provided Air India sovereign guarantees amounting to Rs 7,000 crore. These are contingent claims with a promise by the government to discharge the liabilities. Air India is now left with Rs 2,500 crore, which will be used to clear dues like vendor payments including oil companies and airport operators along with salaries for a few months.

The airline is reportedly looking at an alternative solution, involving rolling over the repayment of working capital debt to the next financial year.

Government-run telecom giant BSNL and its sister firm MTNL  failed to pay salaries to nearly 1.76 lakh employees in February due to financial constraints.  It has since managed to pay salaries in June.

Despite a muted response from last year, the Centre looks to carry out the disinvestment process of Air India.