Mumbai: Gustav Baldauf, who was on 7 April approved as chief operating officer (COO) of flag carrier Air India, is yet to get the final terms of his appointment.
Baldauf has been charged with turning around the bleeding airline. His hiring is subject to approval from the Union government’s cabinet committee on appointments.
Two senior Air India executives told Mint the airline has been unable to settle salary talks with Baldauf, who visited the carrier’s Mumbai headquarters last week to meet board members of National Aviation Co. of India Ltd, or Nacil, which runs Air India.
He was also in the city to attend an acquaintance programme with senior executives and familiarize himself with the organization’s structure and operations.
“Technically, Baldauf cannot assume charge even though Air India had shortlisted him as (its) new chief operating officer. Firstly, the salary renegotiations are not concluded, and finally, the company has not given him an appointment letter,” one of the executives said.
Both the executives declined to be identified because of the sensitive nature of the negotiations.
Mint could not immediately reach Baldauf.
A senior official at the ministry of civil aviation, who also did not want to be identified, said Air India is in talks with the COO-designate for a reduction in salary but nothing has been finalized yet. “The new pay packet details have not come up before the board as of now,” the official said.
A third executive at Air India said Baldauf was to be paid nearly Rs3 crore a year, which the airline now wants to pare.
Baldauf, who has been in the airline industry for 25 years, had earlier worked with Jet Airways (India) Ltd and was most recently executive vice-president (flight operations) at Austrian Airlines.
Air India is expected to post a loss of Rs5,400 crore in the current fiscal year. It bled Rs2,226.16 crore and Rs5,548 crore in 2007-08 and 2008-09, respectively. The trend of losses is likely to continue for a few more years, civil aviation minister Praful Patel told Parliament earlier this year.
Balduaf’s appointment fits into a larger attempt to remake the top management of the stricken airline.
The government in early April chose four independent directors, including Anand Mahindra, vice-chairman and managing director of the Mahindra Group, to join the Air India board. Others named to the board were former Indian Air Force chief Fali H. Major, Ambuja Realty Group chairman Harshavardhan Neotia, and Amit Mitra, secretary-general of the industry lobby group Federation of Indian Chambers of Commerce and Industry.