By Anirban Chowdhury
MUMBAI--State-run carrier Air India Ltd. will clear pending
salaries for September and October by the middle of this month, a
government statement said Tuesday.
The company will pay 2 billion rupees ($37 million) worth of
salaries and INR2.30 billion of other incentives, it said in a
statement.
"We have been paying salaries with a two-month lag, but this
time we will be up-to-date," said an executive at the airline, who
didn't want to be named.
Air India has struggled over the past five years with growing
losses due to high fuel costs, interest rates and tough competition
from rivals. It has also had problems with an inflated salary bill,
mandatory flying to unprofitable routes and the burden of a $15
billion plane order to Airbus and Boeing Co. (BA).
An executive at the Delhi airport recently said the company
still owes it INR5 billion.
The carrier has been surviving primarily on financial assistance
from the government. India has infused INR32 billion of equity into
the airline in the past three years and has agreed to provide
another INR300 billion of funds over the next 20 years.
Air India is also trying to raise money via sale and leaseback
of planes and leasing real estate.
It recently floated a tender to lease out its office space in
Mumbai. The company Tuesday extended time to respond to the tender
to Nov. 12 from Nov. 3.
Write to Anirban Chowdhury at anirban.chowdhury@dowjones.com
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