Mumbai: The ministry of civil aviation on Tuesday invited applications for the chairman and managing director’s (CMD) post at National Aviation Co. of India Ltd, or Nacil, the merged entity of state-run carriers Air India and Indian Airlines. The current CMD, Vasudevan Thulasidas, will step down in March.

Vasudevan Thulasidas, CMD National Aviation Co. of India Ltd

The ministry, which had initially suggested that Nacil should have its top boss from the private sector, is now not insisting on any aviation background for running the state-run carrier, which has a fleet of 140 aircraft, 33,000 employees and revenues of Rs15,000 crore.

Nacil is looking for “good academic record" and “senior level management" experience with a reputed and large organization, according to the advertisement on the ministry of civil aviation’s website. “Persons with technical/MBA qualification and having experience in management and familiarity with finance and commercial operations in air transport will have added advantage," it says.

During the merger, the government approved Air India chairman Thulasidas, 59, to head Nacil with the Indian Airlines’ chairman Vishwapati Trivedi, 53, as joint managing director, through March.

It also appointed a search panel, headed by cabinet secretary K. Chandrashekhar, to identify the next head.

“Yes, there is an advertisement for the top post but Thulasidas may still get one more extension. Besides, Trivedi, who has another seven years, can also be considered for the post," said one person familiar with the thinking who spoke on the condition he wouldn’t be named. The advertisement says internal candidates, aged between 45 and 56, will be considered for the post.

The appointment is for five years or when the candidate turns 58, whichever is earlier.

The salary being offered could be one deterrent for some private sector executives. The basic pay scale mentioned in the advertisement is Rs27,750 and this can go up to Rs31,500 with an annual increment of Rs750. There are, of course, various allowances and perks, though unlikely to match the compensation of most private sector jobs.

Given the powerful role and the opportunity to oversee a turnaround and a possible privatization, it could still attract candidates from the private sector, though they would have to be adept at working with the government as well as entrenched unions.

“Ideally, the current management should continue to oversee the complex and time consuming merger process. It is very important to address the corporate governance issues before its proposed initial public offer," says Kapil Kaul of the Centre for Asia Pacific Aviation, an aviation consulting firm. “But, since the government is looking for a new face, it should look (for) quality management skills and leadership ability to make Nacil an accountable board-run company. If it is not getting such talent from the government, it should look outside government."

Air India and Indian Airlines posted a combined loss of Rs700 crore in the last fiscal year, citing high jet-fuel costs and increased competition.

The airline is also enhancing international flights, including non-stop services to the US from New Delhi and Mumbai. Rival airline Jet Airways Ltd has set up its hub in Brussels to increase international flights from India while Kingfisher Airlines is also planning to start its overseas flights sometime in 2008.

Jet Airways will start its operations to West Asia from early January. Until now, the right to operate West Asian routes was restricted to Nacil and flights to the region now account for one-third of the revenues of Nacil.

The state-run carrier has recently joined the largest operating grouping of global carriers, Star Alliance, and this will force the airline to maintain world-class operating standards and schedules as various other international carriers are interlinked into this operation network. Nacil is also in the process of taking deliveries of 111 planes from Boeing Co. of the US and Airbus SAS of Toulouse. This is the single largest order by the airline in its history after it commenced operations in 1953.