New Delhi: Taking aggressive steps to turn around cash-strapped National Aviation Co. of India Ltd-run Air India in two years, the government has said it would carry out a major revamp of the airline’s top management within a month and divest some stake in the carrier in the near future.
“You will see in the next 30 days a major change in the top management in Air India. Some heads are going to roll,” civil aviation minister Praful Patel told Times Now TV channel. “We are going to bring high quality people of great integrity and people with a proven track record in business.”
Headhunting: Praful Patel says he is going to bring people of high quality with a proven track record to Air India. Harikrishna Katragadda / Mint
The minister’s remarks came amid reports that Air India was expecting an estimated loss of about Rs5,000 crore in the fiscal 2009.
At least seven independent directors, who are internationally reputed, would be inducted on the board, ‘PTI’ said, quoting unnamed sources. At least four such positions are unfilled currently. ‘PTI’ added that the names doing the rounds for inclusion in the Air India board include National Knowledge Commission chairman Sam Pitroda, Infosys Technologies Ltd mentor and chairman N.R. Narayana Murthy and Tata Consultancy Services Ltd chairman and managing director S. Ramadorai.
A global advertisement will also be put out for a new chief operating officer for Air India, said two government officials, who declined being named. Air India does not have such a post at present, with chairman and managing director Arvind Jadhav running operations assisted by directors and executive directors. Besides revamping the board, the government would go in for partial disinvestment of the state-owned carrier in the near future, ‘PTI’ reported, adding that the plan was to ensure a turnaround in two years.
There were indications that the company, which delayed the payment of salaries to its employees by 15 days, leading to protests by worker unions, would do so by 14 July. Jadhav has also asked the top management to forego their salaries for July.
Air India has been facing a financial crunch in the past few years. Its borrowings have risen steeply from Rs6,550 crore in November 2007 to Rs15,241 crore last month. This has been largely due to debt servicing for purchase of new aircraft.