Air India Asks Employees to Help Tide Over ‘Crisis’

Air India, which has delayed salary payments, asked employees to help the country’s national carrier tide over the financial crisis it’s facing.

“It is a fight for survival,” Arvind Jadhav, chairman and managing director, said in a release that contained his comments to employees. “The current financial crunch being faced by Air India needs to be viewed in the global context as the aviation industry worldwide has been passing through turbulent times.”

The chairman’s appeal comes after the Air Corporation Employees Union, the largest workers’ group in Air India, said June 17 that it was considering a strike to protest against the carrier’s decision to pay this month’s salary two weeks late.

The union has written to the management on the late payment and will decide on the strike later, said D.K. Shetty, president of the group. The union represents about 13,000 of the carrier’s 31,000 employees, he said.

Air India is faced with the same issues that others in the aviation industry have been contending with, Jadhav said.

“All airlines in India and abroad have been experiencing low fares, poor load factors, drop in premium travel, decline in cargo loads and low yields due to market conditions created by the global recession,” the chairman said.

Jadhav cited measures taken by airlines such as Singapore Airlines Ltd. and British Airways Plc to combat the effects of the financial crisis.

The airline has sought funds from the government, which owns the company.

Government Help Sought

“Air India has approached the government of India, as the owners of our airline, for infusion of funds both by way of equity and soft loans,” Jadhav said. “We are hopeful that the government of India will extend a helping hand soon.”

The airline is talking with the labor unions to apprise them of the financial situation facing the carrier and the industry, Jadhav said.

Air India yesterday said it has asked senior executives to go without pay in July as the company faces a cash crunch. Jadhav “has requested all executives at the level of general managers and above to voluntarily forego salary and productivity-linked incentive payable in the month of July 2009,” according to the airline’s Web site.

India’s national carrier may have had losses of more than $800 million in the financial year ended March 31, according to the Centre for Asia Pacific Aviation.

A drop in travel demand forced Jet Airways (India) Ltd., the nation’s biggest carrier by market value, to cut jobs and benefits for some of its 13,000 employees to help save as much as $600 million this financial year.