Union aviation minister Praful Patel has said that the ministry is planning a major re-jig of the Air India (AI) management to ensure the airline turns around soon. In an interview with a television channel on Tuesday, Patel said in the next 30 days, there would be major changes in the top management. Additionally, there could be partial disinvestments of Air India in the near future, say civil aviation ministry sources.
The minister also said that major changes would be seen in AI’s board of directors. He further said the airline in the future would recruit the best of personnel with proven track record. Also, several old time directors will be asked to quit and a professional chief operating officer will be appointed under Arvind Jadhav, the chief managing director (CMD) of the carrier. Jadhav, who took over as CMD in May this year, will continue in office. The government could look at inducting as many as five independent directors on the board of AI as part of the overall restructuring plan of the airline. Patel has already indicated the government’s resolve to ?professionalize? the board and some eminent people from within and outside the aviation industry could be roped in to the airline’s board. At present, the airline has 10 directors on its board but only one is an independent director. The rest are either government nominees or AI employee directors.
Nacil (National Aviation Company of India Ltd), which owns Air India, is projected to post losses of over Rs 4,000 crore for FY 08-09. The national carrier recently deferred payment of June salaries to its staff and also requested its senior officials of rank general manager and above, to voluntarily forgo their July salaries in view of the liquidity crunch in the company.
Loss-laden AI didn?t get any budgetary support. Also, the borrowings of the flag carrier rose to Rs 15,241 crore in June this year from Rs 6,550 crore in November 2007. Borrowings have gone up for couple of reasons, servicing of debt due to purchase of new aircraft and also operating losses, which have compounded due to the present economic recession and the high oil prices last year. The carrier, in tandem with the airline?s unions, has drawn up a comprehensive ?short, medium and long? term strategy to get back its lost glory. A turnaround committee has been set up recently, comprising key unions members and the management. The committee will suggest initiatives that would enable the airline to overcome its financial woes. Nacil has several times sought a Rs 4,000 crore bailout package from the government and also a soft loan upto Rs 1,000 crore, but there has been no development on this front so far. However, the government has asked Air India to curtail costs to avail of financial aid. AI is currently working on setting up committees for assessing the reasons for its financial problems. When contacted, an AI official refused to comment on the issues.