Air India crew members go on indefinite strike over non-payment of salaries

Upset over non-payment of flying allowances for the last six months, a section of Air India cabin crew members has called for an indefinite strike from today.

Turning down flying duty, 100 crew members have not registered their attendance in office today, reports said.

Meanwhile, Air India pilots have also threatened to go on strike from April 1 over non-payment of salaries and other allowances for the past four months.

In a letter to the Director-General of Civil Aviation (DGCA) sent on March 6, the Indian Pilots Guild (IPG) said the pilots would not operate flights till their dues were cleared.

While the pilots accepted that Air India was in financial distress, they did not want to endanger the lives of the passengers.

AI deployed bigger aircraft for Praful Patel's family

The Air India had deployed larger aircraft to apparently accommodate the family of the then Union Civil Aviation Minister Praful Patel on their trip to Bangalore-Maldives in April 2010, file notings disclosed by the national carrier indicate.

It had earlier been claimed that since the seven business class seats were already booked on the IC-965, flying from Bangalore to Male, Air India switched to bigger aircraft A320, with 20 business class seats, to accommodate seven members of Deshpande family -- in-laws of Patel's daughter Avni.

The passenger list now disclosed after the directives of the Central Information Commission shows that the Deshpandes were indeed on board IC-965 April 25, 2010 for Bangalore-Male and IC-966 from Male to Bangalore on April 28, 2010.

The list shows seven family members who travelled on the flights included Congress leader R V Deshpande, Radha Deshpande, Prasad Deshpande, Meghna Deshpande and Master Dhruv, in addition to Avni and her husband Prashant Deshpande.

According to the disclosure, the notings show that instructions were issued over email from Mumbai Headquarters to change the "equipment" of Bangalore Male flight on April 25 and Male Bangalore on April 28, 2010 from a smaller Airbus A319 to larger A 320.

The Air India normally plies Airbus A 319 aircraft on the route which is smaller one with eight business class seats and 114 economy class seats.

The order, a copy of which was supplied with the RTI reply said, "Due to heavy demand in J Class on Bangalore Male on April 25, 2010 and Male Bangalore on April 28, 2010, the J Class capacity is increased on the above two dates by rotation change in equipment."

Report: Jet Airways seeks govt help to raise funds

Top Indian carrier Jet Airways has sought government help to secure additional working capital loans from banks and an extended credit period from state-run oil marketing companies, a daily newspaper reported.

The airline, which has a two-month credit period with oil companies, hopes to get this extended to three months, the report quoted an unnamed company official as saying.

Jet also wants help to secure Rs 10 billion in working capital loans, the official added.

In January, Jet posted its fourth straight quarterly loss, as it struggled with high fuel costs and low fares.

India's airline companies face a severe cash-crunch and have a massive debt pile of about USD 20 billion. Jet itself has a debt of about 140 billion rupees, the report said.

All but one of India's six main airlines are loss-making, with state-run Air India on government life-support.

Jet is yet to pay January salaries to employees, the report said.

In a move to help the embattled sector, the federal government recently allowed India's airlines to import jet fuel directly.

Union Minister Praful Patel fights bribery charge, writes to PM

Union Minister Praful Patel on Thursday  found himself at the centre of pay-off allegations concerning a USD 100 million Air India contract during his tenure as Civil Aviation Minister, but he rubbished the charges as "baseless and preposterous".

A leading Canadian newspaper, Globe and the Mail, reported that an Indian-born Canadian citizen, Nazir Karigar, is to be prosecuted on charges of paying off Patel in a case in which a former Mumbai police chief also figures.

Karigar is accused of paying bribes and being involved in a bid-rigging scheme in 2007 in an unsuccessful attempt to win the contract from Air India for computerised passenger face recognition biometrics system. The airline ultimately abandoned the plans for such a system.

According to the newspaper, investigators allege that in early 2007, Karigar met Patel, now Minister for Heavy Industries, along with one of his political allies Laxman Dhoble.

Later, Karigar described to others, including one cooperating witness from CryptoMetrics, the company bidding for the contract, how he allegedly gave USD 250,000 to Dhoble "to pass on to Mr Patel so the Minister could use his influence to make the project happen," the report said.

Part of the movement of that money has been documented in a lawsuit in the Supreme Court of New York where CryptoMetrics sued Karigar, saying that it had paid him USD 250,000 on the condition that Air India contract would be signed within days, it said.

However, the newspaper also stated that there is no evidence in the court records that Patel received the money.

Stoutly denying the allegations, Patel, when contacted for his reaction, said the claims of bribery appeared to be "a perfect con job" by somebody trying to convince his company that he could deliver a contract if he is paid.

Patel disclosed that he had written to Prime Minister Manmohan Singh soon after the Delhi bureau chief of Globe and Mail had sought his reaction to the allegations on Monday.

He told the Prime Minister that he had made it clear to the journalist that the allegations were baseless and preposterous and that he would be constrained to examine all legal options to counter them.

Meanwhile, he had made some "preliminary enquiries" with Air India which had informed him that in 2006 the airline had floated a tender for the equipment. The tender was, however, scrapped "virtually at the inception", he wrote.

The Minister requested Singh to direct Air India to forward all relevant information and documents of the tender to PMO or to any agency "nominated by you".

He also wanted "factual position" to be conveyed to the authorities in Canada in order to avoid any embarrassment to the government or to him personally.

The newspaper said that the Canadian Justice Department was planning to prosecute Karigar on charges that he violated the Corruption of Foreign Public Officials Act, a law that forbids payment of bribes abroad. The case is scheduled to be heard in September.

According to the newspaper, the case has been in the making for more than four years and involves Karigar, the bankrupt Ottawa-area tech firm, former Mumbai Police Chief Hasan Gafoor and Patel. The newspaper quoted the Royal Canadian Mounted Police (RCMP) as alleging that Gafoor who was then Director of Security at Air India, had conspired with Karigar, his childhood friend.

In a telephone interview to the newspaper, Gafoor denied helping Karigar rig the contract in favour of CryptoMetrics, saying that another department at Air India was responsible for awarding such contracts.

Gafoor stated that he had not spoken to Karigar in two or three years and was unaware that he had been implicated in a criminal conspiracy along with him.
He also pointed out that CryptoMetrics did not get the contract, "nor did anything come out of it".

The newspaper claimed that interviews with a number of sources close to the investigation as well as a review of documents filed in two legal proceedings in the US have revealed that the charges related to Karigar were on behalf of CryptoMetrics, a company which had offices in New York area, Ottawa and Mumbai and which declared bankruptcy shortly after Karigar was charged.

Quoting RCMP, it alleged that CryptoMetrics had received an internal draft copy of the Air India tender two months before it was officially released to other potential bidders.

It also alleged that at least USD 250,000 was wired by CryptoMetrics to India and distributed to Gafoor's Air India "co-workers, including a deputy in the security division." Gafoor denied knowing about any bribes paid by Karigar to his staff.

Police sources were also quoted to say that Karigar and CryptoMetrics invited Air India officials to become part owners in the company and were offered shares. Police said the inducement ensured that only two firms were shortlisted for the contract, CryptoMetrics and a lesser known Canadian firm, Ipcon, the latter being a dormant company founded by Karigar.

Dhoble, described as Patel's political ally, had declined to comment on the allegations in detail, the paper said.

Air India pilots go on 'no-pay-no-work' agitation, operations disrupted

Flight operations of Air India were severely affected on Saturday as  a section of its pilots went on "no-pay-no-work" agitation from midnight tonight against the airline management's failure to pay their salary.

Eight flights to Nagpur, Ahmedabad, Chennai, Leh, Bangalore, Bagdogra, Amritsar and Kolkata were cancelled after 12 pilots reported sick this morning.

"We have clubbed the early morning flight to the above destinations with the flights operating later in the day," an Air India official said.

The pilots earlier Friday held a meeting in Delhi, Mumbai, Kolkata and Chennai and decided to go on the agitation from midnight tonight, said a pilot associated with the development.

This is like "work-to-rule", said another pilot who requested anonymity.

"The airline management can pay the oil companies when they refuse to sell them jet fuel. They can pay for car rental when the company asks for payment but they have no money to pay the employees for months", the pilot said.

Air India as lenders reject debt restructuring plan

A debt restructuring plan for troubled national carrier Air India has been rejected by the airline's lenders, a daily business newspaper reported on Wednesday, as bankers refused to take a stake in the loss-making airline.

A consortium of banks with exposure to state-owned Air India, rejected a proposal to convert 60 percent of the carrier's USD 4 billion debt into long-term loans and accept the balance in equity, the report said citing unnamed sources.

"We are not in a position to take any haircut," the unnamed chairman and managing director of a public sector bank involved in the discussions was quoted as saying by the newspaper.

Banks are reluctant to accept dividend-paying equity in the airline given its unprofitability, the report said.

The 26-member consortium, led by State Bank of India and including IDBI and Bank of Baroda, in November gave broad approval to its financial restructuring, a source told Reuters.

Rising oil prices, high taxes of jet fuel and a fierce price war driven by high competition has hurt profitability of Indian airlines, with private carrier Kingfisher Airlines also struggling to repay creditors.

The aviation ministry proposes to provide Rs 330 billion to Air India by 2017 as part of the government's 12th Five-Year Plan, according to a working group report seen by Reuters last month.

A government report in December said the total debt of India's airlines is expected to hit USD 20 billion in the year ending March. Air India is seen contributing more than half of the projected total losses of USD 3 billion for the industry in 2011/12, the Centre for Asia Pacific Aviation has said.

AI crisis: Govt to infuse Rs 6750cr over a 10-year period

Government is considering writing off Rs 4,500 crore cash loss of Air India and infusing additional equity of Rs 6,750 crore over a 10-year period, as lenders of the beleaguered carrier on Monday broadly approved its debt recast plan.

With the go-ahead from the lenders, Civil Aviation Ministry would in the "next few days" start preparing a note for the Cabinet on both counts, official sources said.

At a two-hour meeting with officials of the Civil Aviation Ministry and the national carrier, representatives of a consortium of 14 banks led by SBI approved the debt recast plan, which had got the green signal from the Reserve Bank of India (RBI) last week, the sources said.

This crucial meeting came a day ahead of the meeting of the Air India Board here.

The total debt of Air India, consisting of aircraft loans and working capital loans aggregate Rs 43,777.01 crore. The working capital loan is Rs 21,511.10 crore while the aircraft loan is Rs 21,412.06 crore, latest figures show.

The approval of the debt restructuring plan would ease the massive debt servicing burden of the troubled airline. The RBI had last Thursday approved the extension of its loan tenures from 10 to 15 years.

The bank representatives are understood to have sought clarifications on certain regulatory issues from the RBI, the sources said, adding that they wanted to become part of a proposed committee to be set up to monitor the implementation of Air India's overall turnaround plan.

Detailed discussions were carried out with the bankers on various aspects of Air India's precarious financial situation, apart from its balance sheet, financial position and future projects, the sources said.

After tomorrow's Board meeting, a Group of Ministers headed by Finance Minister Pranab Mukherjee would meet. Thereafter, the Cabinet would decide on the crucial issue of infusing fresh equity of Rs 6,750 crore and writing off of cash losses of Rs 4,500 crore, they said.

Under the Rs 18,000 crore Corporate Debt Restructuring (CDR) proposal, the lenders are to decide on extending the tenure of Rs 11,000 crore short-term loans into long term loans of 15 years and convert Rs 7,000 crore debt into equity.

Air India also owes Rs 2,300 crore to public sector oil marketing companies, Rs 480 crore as interest on working capital loans, Rs 200 crore as interest on aircraft loans, Rs 350 crore towards employees wages, Rs 367 crore to other vendors and Rs 75 crore to airport operators.

The national carrier, under the aegis of SBI Caps, had submitted a restructuring proposal to RBI seeking its permission to extend the loan tenures, among other issues.

The national carrier has registered a loss of Rs 5,548.26 crore during 2008-09, Rs 5,552.44 crore during 2009-2010 and Rs 6,994 crore (provisional) during 2010-11.