Air India rescue package likely

The airline has posted a huge loss

The Indian government is likely to announce a bail-out package to its struggling national carrier Air India, the federal aviation minister has said.

The airline has delayed payment of June salaries and incentives to its 31,500 employees by a fortnight.

The state-owned airline posted an annual loss of about 40 billion rupees ($800m), reports say.

India's once booming aviation sector has been hard hit by soaring costs and declining passenger traffic.

According to one estimate, domestic air travel in India fell by 15% in April from the same month a year ago.

Reports suggest that the government is working on a substantial bail-out package for the ailing airline.

This is the first time in the history of Air India that the payment of salaries to its employees has been delayed.

Airlines around the world are struggling to cope with declining passenger traffic due to the global slowdown.

British Airways has asked thousands of staff to work for nothing, for up to one month, to help the airline survive.