Pilots fail to repay bank loans

Hey Friends,

Today while reading newspaper (Times of India), I got stuck reading the news article with the title “Airline turbulence makes jumbo EMIs tough for hi-flying pilots” on TOI edition “Delhi Times”.

We all are aware that Indian aviation industry is facing crisis due to pilot’s strike from the past few months. Daily, we can see two to three media articles on pilot strike. Yeah Friends, we all are concerned about Indian carriers losing money and struggling with huge debts. But we totally overlooked the pilot’s condition. We people never gave a thought on pilot’s living on no salary for six months. We all have personal commitments to our family. Realizing the cost of living in Delhi, one can agree the fact that the ratio of people taken loans is very high. From buying a flat to buy a car, the EMI scale could range from INR 5000 - 1, 50000 per month installments. Due to this ongoing pilot strike, there have been cases of people selling off their homes because they could not afford the EMIs. Let’s have a look on some of the real life examples below:

Real Life Examples

“Captain Tauseef Mukadam, joint secretary of the now derecognized Indian Pilots Guild had to ask three-month waiver from the bank on his housing loan.”

“Anand Verma (Name changed), a pilot with a salary of INR 2.25 lakh per month has bought a plush apartment when he landed a job with Kingfisher Airlines, and was paying an EMI of INR 62,000 per month on the housing loan he took. But when pilots’ salaries were indefinitely delayed, he ended up exhausting his savings to ensure he could pay his EMIs, before finally switching jobs”. He said “It was very stressful. But not everyone has a corpus of funds to fall back on, and I had colleagues who were defaulting on loan repayments”. 

High Education Fees

To become a pilot, a person spends a hefty amount ranging from INR 25 lakhs to INR 40 lakhs approx depending on the type of pilot rating and flying school. Seeing the Indian aviation scenario now, the parents and the students are really concerned about the return on investment. Many of the students took education loan to finance their fees, which they have to repay on getting a job. In case these pilots do not make money after passing out, there are problems in repaying the loan.

Banks get Benefits

As per banks, there is no policy on whether loans to pilots are to be screened. In case pilot face difficulty in repaying his education loan, the case is handed over to the bank’s recovery team which then add interest to their loans. The recovery team also looks into their personal/professional issue and gives them a three-four month buffer.