The government will restructure the board of the cash-strapped carrier Air India within a month, civil aviation minister Praful Patel said on Wednesday.
The government has appointed SBI Capital Markets Ltd to prepare a restructuring plan for the state-owned carrier. Air India will submit its restructuring proposal to prime minister Manmohan Singh after which the government will decide on the financial support for the company.
Air India, which suffered cumulative losses of Rs 7,200 crore as on March 31, 2009, has demanded a bailout package of Rs 14,000 crore to tide over financial crisis.
?We have appointed SBI Caps. Soon, we would be getting feedback on what would be the short-, medium- and long- term restructuring required for Air India,? Patel said at an India aviation conference.
?We will be undergoing a major transformation of the management. We will involve lot of important and eminent people on the board of Air India and have an international advisory board as is a practice across the world,? he said. The government and industry chamber Ficci are organising an India Aviation 2010 international exhibition and conference from March 3-7, 2010, in Hyderabad. Mentioning that airlines companies world over were migrating from full service to low-cost carriers, the minister said India?s operators including the national carrier will also have to look at such a transition.
?We need to understand that growth has to be sustained with economic viability and there is a need for transition from a full service carrier to probably to a lower cost model,? he said. ?I don?t say that everybody will have to switch over from that model to the other model but a right balance has to be struck and I see these changes coming in next one or two years,? Patel added.