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No money for salaries: Arvind Jadhav tells Air India Unions

MUMBAI: The head of India's national carrier has told his employees that the airline was in dire straits and would find it difficult to pay salaries. The official, Arvind Jadhav , the chairman and managing director of Air India, was addressing a closed-door meeting of representatives of trade unions in New Delhi on Monday. Jadhav painted a bleak picture of the future of the state-owned airline, that was set up by the Tatas in 1932 and nationalised in 1953. The government was reluctant to put in more money and a restructuring of Air India's mountain of debt, around Rs 44,000 crore, was taking longer than expected, Jadhav said in the course of the meeting, which sent on for over eight hours. The contents of Jadhav's address was described by three people present at the meeting The 30,000 employees will have to brace themselves for hard times because paying salaries on time will be difficult as the "airline is left with no money," Jadhav was quoted as saying. "Where will I get the money to pay salaries now is a concern," one of the union members present at the meeting quoting the CMD as saying. Officials representing the major unions of Air India, including The Air India Cabin Crew Association, Air India Employees Guild, the Indian Pilots Guild and Indian Commercial Pilots Association were present at the meeting. In a statement, Air India described the meeting as routine. "The management has always shared the ground realities with all its employees. There is no doubt about Air India being in financial difficulty. The CMD apprised the employees of this difficulty and sought their support to unitedly work for the success of the TAP and for coming out of the present situation. All stake-holders - including employees - have to contribute to this herculean task of making Air India profitable," it said. BORROWING TO PAY SALARIES The meeting came a day before Air India paid May salaries to its employees, a month behind schedule. But the airline, whose Mumbai headquarters, the eponymous Air India building , still dominates the Nariman Point skyline was only able to pay basic component of salaries to over 13,000 employees of its employees belonging to the international operations arm of the airline. The PLI, a major competent of salaries of some executives such as pilots, has not been paid since April to the employees of the international arm. The PLI element could account for between 50 to 80% of salaries. Air India's current avatar came about due to the merger of two state-owned carriers, Indian Airlines, a domestic carrier and the international carrier also known as Air India. The merger took place in 2007. Employees of Air India have been facing delays in receiving their salaries for over a year but the situation has worsened in the past six months. A lag of over two months is becoming a norm, according to employees. In February, Air India borrowed Rs 600 crore from Corporation Bank , a state owned bank to pay wages. Last month it received a temporary reprieve when the government cleared Rs 250 crore of the Rs 800 crore pending dues from VVIP operations and used this amount to pay employees. In June, Air India resorted to borrowing once again, this time from HDFC Bank and others. It managed to garner Rs 200 crore. But it is finding it difficult to continue these borrowings because of huge interest costs. Working capital loans account for half of the debt burden of Rs 44,000 core.