CCEA Permitted Infusion of Rs 1200 crore in Debt-ridden Air India

The Cabinet Committee on Economic Affairs (CCEA) on 30 December 2010 permitted infusion of Rs 1200 crore in state-owned Air India. CCEA however asked the airline to rationalise its wage bill, an issue which has brought the company management and unionised staff on collision course in the recent past. The Indian government had in February 2010 released Rs 800 crore to Air India as part of a total financial assistance of Rs 2000 crore that the Centre had committed to the debt-ridden Air India committed in 2010. Air India’s total debt burden stands Rs 40000 crore (short and long term). Also the carrier accumulated loss of over Rs 12000 crore as on March 2010. In spite of government directive to cut cost by reducing its wage bill of Rs 3100 crore annually the Air India management failed to do so in the face of resistance by its employees.