In a major setback for Air India?s CMD Arvind Jadhav, the company?s board on Thursday sacked Pawan Arora from the post of chief operating officer of its low-cost arm Air India Express. As reported earlier, Arora?s appointment had become controversial with independent directors objecting to it on the ground that he did not have the requisite qualification and material facts about these were not brought to the board when his appointment was approved on September 28.
The board also decided to review the procedures followed in the selection of Stephen Sukumar for the post of chief training officer for National Aviation Company of India Ltd (NACIL). The development comes as a major victory for the independent directors like M&M vice chairman and managing director, Anand Mahindra and Ficci secretary-general Amit Mitra among others, who had also met the Prime Minister?s principal secretary, TKA Nair, on the matter. Sources said Arora had been asked to clarify the issues raised over his qualification in the board meeting but he was not given the chance to defend himself.
?In fact, the board meeting of Air India Express was cancelled in the last moment leaving no scope for Arora to submit his version,? the official familiar with the development said. ?Arora had come prepared to clear the clouds over his qualification but he was not given any chance. The independent director Amit Mitra was not in the mood of having any discussion on the issue. The decision to remove Arora came like a fatwa,? the official said.
A two-member review committee has been appointed to look into the process followed for the recruitment.
Airline sources said that the government-appointed directors first took the decision to remove Arora and then functional directors agreed to it. The directors also expressed their unhappiness over the financial performance of the company in the financial year ending March 2010.
?The airline has reported enormous losses in 2009-10,? another board member said.
The airline in a statement, however said its performance had significantly improved with net losses coming down 23% to Rs 5,551 crore in 2009-10 compared to Rs 7,189 crore in the previous year. ?The operating loss of the company declined 39% at Rs 3,472 crore in 2009-10 from Rs 5,672 crore in the previous fiscal,? the statement, issued after the company board approved its financial statement for 2009-10, said.
The government-appointed directors seem to be in an all-out war with airline CMD with the former questioning various decisions of the management. A civil aviation ministry official though backed Jadhav?s stand saying he has the vision to turn around the airline and should be provided a conducive environment to function.
?The most interesting part is yet to happen possibly after December 31 with possibility of change in airline board structure,? he said.
In spite of the increased interest burden Air India has reduced its operating loss to Rs 967 crore in the first six months of 2010-11 compared to Rs 2,216 crore in 2008-09. The management has also said that it can not implement the wage restructuring plan since the approval of the government at higher level is yet to come by.
The airline board which met in the Capital on Thursday is understood to have looked into a long-pending proposal to reduce retirement age in the airline to 58 years from 60 years now.