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ShareMumbai: Cash strapped Air India can breathe a sigh of relief -- at least for this month. The airline has secured a Rs 500-crore loan from State Bank of India to pay employees salaries and flying allowances.
"The loan amount has been granted by the bank and it will be infused for payments in the next couple of days," said an official spokesperson for Air India.
However, an airline source said the amount is only been given to meet immediate expenses, especially employee costs. "Currently, the airline has working capital of Rs 16,000 crore, and we will decide on future requirements as and when the time comes," said the highly placed source.
The airline has been in discussions with various financial institutions to secure additional funds to meet its current liabilities, including payment towards salary and productivity linked incentive to employees.
The airline needs Rs 5,000 crore of financial aid and is looking at Rs 3,000 crore from cost reductions.
Though the airline has a dire need for capital, these talks with various financial institutions were pushed on the discussion table after a section of pilots, under the Indian Commercial Pilots' Association (ICPA), said that they would take 'industrial action', if their demands were not met.
Initially, R S Otal, general secretary of the ICPA, had said that they would take severe action if the airline did not pay their dues by November 1. However, the ICPA has now added a few more demands. And if these are not met before November 10, the pilots will go on strike on November 24, after serving two weeks notice to the airline, the ICPA said.
"Other than our payment issues, we would also like the management to give us a written assurance that there will be no delay in payments henceforth," said Otal.
The other demands that the pilots cadre wants the management to address include setting up of a competitive agency reviewing the airlines' decision, professionalism, parity in pay scale with other pilots, taking firm steps to turning around the airline, and accountability for all the decisions that have been taken.
"There are a few decisions that we would like the airline to take accountability for. This includes the parking of two aircraft each in Jordan and Mumbai that are yet to be leased or sold out. We would also want the airline to answer as to why certain profitable routes, which were an integral part of the winter schedule, have been cancelled," explained Otal.
