Mumbai, March 26 (PTI): Cash-strapped Air India has deferred the payment of March salary to its employees by a week to April 7, airline sources said today.
The usual practice is to pay salaries within the month but this is the second time in the recent past that the national carrier has had to defer salary payments.
In June last year, Air India had postponed salaries by 15 days because of non-availability of funds.
The cash crunch caused by the recession facing the aviation industry and other committed payments, including interests on the aircraft delivered, has led to the decision, the sources said.
National Aviation Company of India Ltd (NACIL), which runs Air India, has been suffering losses since its inception with Rs 2,226 crore loss in 2007-08 and about Rs 5,500 crore loss in 2008-09.
The airline already has over Rs 16,000 crore working capital borrowings on its balance sheet, coupled with around Rs 7,200 crore expected losses last fiscal.
Its borrowings have risen from Rs 6,550 crore in November 2007 to Rs 15,241 crore in June 2009, primarily on account of interest payments on acquisition of aircraft.
Air India may shelve its plans to hive off its cargo business as a separate entity and is likely to take a final call on the issue shortly, airline sources said today.
Instead of setting up an independent subsidiary business unit and creating separate books of accounts, the airline management is now toying with the idea of keeping the cargo unit within NACIL, the sources said.
Besides, there was an entire range of tax issues involved in case NACIL decided to convert its cargo unit into a separate company.