The new entity into which the state-owned carriers Air India and Indian Airlines merged, National Aviation Co. of India Ltd (Nacil), will have a new operating structure along the lines of international airline majors such as Deutsche Lufthansa AG and Singapore Airlines.
Leading business consulting firm Accenture on Wednesday made a presentation before the Air India board on the suggested structure of the new company.
According to the new organizational structure, Nacil would broadly consist of agoverning board, a corporate body and six strategic business units (SBUs).
These strategic units include passengers, cargo, aircraft maintenance and repair, ground handling, low-fare operations and other related business including information technology (IT) services.
This is the practice with leading airlines worldwide. For instance, German aviation group Lufthansa, besides its passenger airline, has Lufthansa Cargo, Lufthansa Technik (aircraft repairs), Lufthansa Systems (IT services), LSG Sky Chefs (catering) and other related activities.
Similarly, Asia’s leading carrier Singapore Airlines has subsidiaries including SilkAir, Tradewinds Tour and Travel, SIA Engineering Company, SIA Cargo and Singapore Airport Terminal Services (SATS).
Gunjan Chanana, public relations manager, India, of Singapore Airlines, said SilkAir is a full-service carrier operating short-haul routes, while SATS is into ground handling. Air India has a joint venture with SATS to undertake the ground-handling project of the under-construction Bangalore International Airport.
To give its SBUs operational freedom, Nacil plans to have senior managers leading them. “Either functional directors or executive directors of the company will head these separate business units. Appointments in this regard would be made soon. Besides the company structure, the roles and positions of human resources also will be designed on the basis of the business model suggested by Accenture,” a senior Air India executive, who did not wish to be named, said.
The proposed structure, which is under the consideration of the national carrier, envisages reducing the number of positions of executive directors to 39 from the current 54.
Under the new structure, the company board will have the role of strategic supervision and review of the performance of business units. The proposed corporate body would assume responsibilities for overall policy matters, and the six SBUs would be accountable for operations and business planning.“These changes would be implemented immediately after the legal merger, which will take place in a couple of weeks,” said another Air India executive, who too did not wish to be identified.
Earlier, the ministry of corporate affairs had approved the merger of Air-India and Indian Airlines on 22 August.