BackPMO likely to form search panel for new Air India chief
PMO indicates to civil aviation ministry it wants panel to find a candidate after two failed attempts to do so in past year
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New Delhi: The Prime Minister’s office (PMO) is likely to form a search committee to find a replacement for Air India Ltd chairman and managing director (CMD) Rohit Nandan, whose extended term is set to end in August.
The PMO has indicated to the civil aviation ministry that it wants a three-member committee to find a candidate to head the state-owned airline after two failed attempts to do so in the past one year, said a person with knowledge of the development on condition of anonymity.
Opting for a search committee to identify Nandan’s successor gives the government the option of routing the appointment through the appointments committee of the cabinet, which may have prompted the move, this person said.
The Public Enterprises Selection Board (PESB), which makes such appointments, had invited applications for the Air India CMD’s position earlier this year.
Some 28 people, including half-a-dozen Indian Administrative Service (IAS) officers, applied for the post, said a second person with knowledge of the subject, who also declined to be named. These applicants included people who worked under Prime Minister Narendra Modi when he was chief minister of Gujarat until May last year.
Finding a CMD is crucial for Air India as it battles more intense competition after the launch this month of Vistara, a joint venture between Tata Sons Ltd and Singapore Airlines Ltd.
Air India has debt of ₹ 40,000 crore; it is estimated to have posted a loss of ₹ 3,900 crore for the year ended 31 March, 2014. It posted a loss of ₹ 5,100 crore in 2012-13 and a loss of ₹ 7,100 crore in 2011-12. The airline was offered a ₹ 30,000 crore bailout by the government in 2012.
Despite several requests by PSEB, the aviation ministry did not provide the board a date when it could interview short-listed candidates, said a third person aware of the situation. He also declined to be named.
The aviation ministry finally decided a few weeks ago to write to the board and request to be exempted from PSEB’s selection process. The ministry has done so now.
The search committee will now vet the applications, select a name, and recommend it to the appointments committee.
There are other reasons why the search committee route has been adopted, said the second person quoted above.
For one, many of the IAS officers who have currently applied for this position have said they will only take up the job if the retirement age is moved to 60, from 58 currently.
Air India is the only public sector organization to have an age bar of 58. If the limit is raised for the CMD’s post, it would have to be raised for other employees as well—not the best thing to do at a time when the airline is trying to reduce flab and cut costs by allowing people to retire early.
The search committee, however, is free to ease the age restriction when it finds a suitable candidate. It will also have greater freedom in offering a potential CMD from the private sector a salary that’s higher than the ₹ 2.5-3 lakh that’s typically offered to an appointee in the public sector, the second person said.
Nandan, a 1982 batch IAS officer, is the first chairman of the state-owned airline to have completed his term since 2007. In the four years to mid-2011, the airline saw the entry and exit of four chairmen—V. Thulasidas, Raghu Menon, Bharat Bhushan and Arvind Jadhav.
Nandan’s term expired in August 2014 and he was granted a three-month extension then by the PMO, which turned down civil aviation minister Ashok Gajapathi Raju’s plea for a two-year extension to maintain stability at the airline. His term was again extended till August this year after a replacement for him could not be found in those three months.
“If Air India is to be a world player, its mindset has to change, its quality of service to customers has to become better and not be limited to just pleasing the powers that be. The route planning has to be market-oriented and not cater to a selective mindset," said Mohan Ranganathan, a Chennai-based aviation safety analyst. “What AI needs is an independent-thinking chairman with a free hand, without government interference."
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