Government pushing Air India to the wall

Cash-strapped national carrier Air India is on the verge of collapse with the government also refusing to pay for the services it received. Reports suggest that the finance ministry has refused to honour Rs800 crore payments due to Air India for flying government VVIPs, as, according to the ministry, the amount quoted was an "unexamined figure".

Denied fuel at airports for want of cash and unable to find money to pay its 40,000-odd employees, the `Maharaja' is in an unenviable situation.

Pilots are leaving en masse and, according to reports, over 20 pilots have already exited Air India over the last month and joined private airlines. Many more are expected to quit in the next few weeks, sources say.

Private airlines like Indigo and Kingfisher are also luring Air India pilots with higher pays while some have joined foreign carriers like China-based Spring airlines and Hong Kong-based Dragonair. Tiger Airways and Qatar Airways have also reported to have made offers.

The government, which released Rs250 crore to the airline to clear part of its fuel bills, is now looking for cheaper alternatives, including the Air Force, to fly its VVIPs.

Air India sources say the government is least worried over its default in payments and is also not ready to bail out the airline.