AI to chalk out new turnaround plan today

Written by Nirbhay Kumar | New Delhi | Updated: Jun 1 2010, 01:49am hrs
A plan for new routes and separate profit strategies for each special business unit (SBU) would be the key discussion points as Air Indias newly expanded board meets for the first time in Mumbai on Mondayin the backdrop of widespread condemnation of the recent employee strike in the ailing state-owned carrier.

The strategic board of the airline which includes industry captains like M&M vice-chairman Anand Mahindra, Ambuja Realty chai-rman Harsh Neotia and Dubai-based Indian business man Yusuff Ali would also formulate strategies to deal with operational disruptions arising out of agitating employees and improve revenue generation.

We have a strategic board (the newly appointed independent directors head strategic committees formed by the airline). It will meet on Monday. The meeting will set the ball rolling on what the airline wants to do in coming years, Air India CMD Arvind Jadhav told FE.

The airline has set a very optimistic and high target for revenue. The board members would discuss it, an official said. The strategic board would also discuss issues related to marketing and schedules besides revenue enhancement measures and disruption management, he added.

The SBUs are designed to be independent profit centres. Recently, some members of the AI board met finance minister Pranab Mukherjee to seek government help for the proposed restructuring of the airlines Rs 21,000-crore debt to cut cost of servicing it. In March, the airline had set up four strategic committees headed by independent directorsFicci general-secretary Amit Mitra and Air Chief Marshal Fali H Major, apart from Mahindra and Neotia. Ali was inducted into the board later. While the audit and finance committees are steered by Mahindra and Neotia, respectively, the panel on human resources is headed by Mitra and Fali Major.

Kotak Mahindras executive vice-chairman and MD Uday Kotak is a special invitee on the finance committee. AI is currently struggling to come out of one of the worst financial crisis in its history. The airline is estimated to have an accumulated loss of over Rs 12,000 crore as on March 2010.