Air India has finally paid the salaries for the month of April and May to its 30,000 employees on Tuesday but failed to provide productivity linked incentives to more than a third of its total workforce, signalling that cash-crunch may delay payments in the coming months.

The carrier has again borrowed from banks, including HDFC Bank, to tide over the crisis, according to sources. The airline had earlier taken 600 crore loan from Corporation Bank to pay wages for the month of January. Air India has an annual wage bill of about 3,000 crore. Discontent among employees will continue to persist as PLI accounts for 50-80% of total salaries.

"The issue of non-payment of salaries is now a common thing in Air India but at the same time the government also has to put in the money that is due to Air India. It is now becoming a survival issue," said George Abraham, leader, Air India Employees Guild.

Meanwhile, Government is understood to have asked Air India to prepare a 8 to 10-year-plan of resource generation to revamp itself by implementing the turnaround and financial restructuring programme to the hilt.

With a Group of Ministers (GoM) last week setting the ball rolling for effecting the turnaround, Air India expects another tranche of Rs 1,200 crore as equity in July and plans to operationalise two subsidiaries on MRO (maintenance, repair and overhaul) and ground-handling as soon as it gets the official nod, sources said.

It is also seeking total infusion of Rs 5,000 crore during this financial year itself, they said. The government has already infused Rs 2,000 crore in two tranches of equity, raising the airline's equity base to Rs 2,145 crore.

A plan would be prepared for the next decade or so as to how much equity infusion would be required by the airline to make it self-sustaining and how it would generate resources to emerge as a strong airline of the region, the sources said.

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