Air India has revealed it does not have the finances to pay for salaries of its employees beyond March. Senior management have briefed the civil aviation ministers on the dire situation and warned unless it immediately releases the remaining Rs 1,200 crore equity support, which has been opposed by finance and home ministries, the airline may have to cease operations.
Chief Commercial director Arvind Jadhav told Hindustan Times that Air India is “financially constrained” and in “a severe debt trap".
He said: "The interest outgo on working capital and other term loans is huge. We are borrowing to pay interest and we are borrowing at steep interest rates because AI's credit worthiness isn't all that rosy.”