Air India has managed to procure a Working Capital loan worth Rs. 500 crore from SBI. The loan would be used in payments of delayed allowances and incentives to the employees. AI was in urgent need of loans worth Rs. 400 crore .
The aircraft's pilots had planned to go for a strike from November 24 to protest against the non payment of allowances and incentives pending since last few months. Had the strike taken place, it would have affected the domestic flights operated by Air India.
"All employees, including pilots, should understand the difficult times the industry is going through. As far as salary payment of expatriates is concerned, there is no disparity between salaries of Indian and expatriate pilots. Since the expatriate pilots are on contract, they have to be paid on time," said an Air India spokesperson.
Last month, the Indian Commercial Pilots' Association (ICPA), the union of the erstwhile Indian Airlines pilots had threatened to go on "non- cooperation" from November 1 if the pending allowances were not paid by then. Following the threat, the airline asked for some time to obtain bank loans and promised the payment by November 10.
Allowances and incentives constitute around 65%-70% of a pilot's salaries. ICPA sent a notice to the Chairman and Managing Director of the airline complaining against repeated non payment of dues and allowances since June 2009.
Lately, the airline has been going through difficult times. Most analysts say that government ownership is the major cause for this. In 2007, the government forced the airline into a poorly conceived merger with Indian Airlines, which was also state-owned. Politicians have influenced the company's dealings with labor unions, leaving the airline with a much bigger and better-paid staff of 31,000 that it cannot afford.