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Business News/ Companies / News/  Govt overrules ministry, Star Alliance on Air India chief term
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Govt overrules ministry, Star Alliance on Air India chief term

The move indicates that the new govt prefers to appoint a new person for the post after Rohit Nandan's term ends

Rohit Nandan, a 1982 batch IAS officer, is the first chairman of the state-owned airline to have completed his term since a botched Air India-Indian Airlines merger in 2007.Premium
Rohit Nandan, a 1982 batch IAS officer, is the first chairman of the state-owned airline to have completed his term since a botched Air India-Indian Airlines merger in 2007.

New Delhi: The government has overruled requests by aviation ministry and Star Alliance, granting extension of only three months for chairman and managing director (CMD) of Air India LtdRohit Nandan.

The government in an 11 August order to the aviation ministry said “the selection process of new CMD may be completed" in the three-month period.

The move indicates that the new government led by Prime Minister Narendra Modi prefers to appoint a new person for the post after Nandan’s term ends, two government officials said.

Last month, the aviation ministry sought a two-year extension for Nandan, whose three-year term ended on 11 August.

“They have only given three months. So it’s likely a new candidate will be given a permanent posting after that," said a government official who asked not to be identified.

A second government official confirmed the move.

Nandan, a 1982 batch Indian Administrative Service (IAS) officer, is the first chairman of the state-owned airline to have completed his term since a botched Air India-Indian Airlines merger in 2007.

Since then, the airline had seen the entry and exit of four chairmen—V. Thulasidas, Raghu Menon, Bharat Bhushan and Arvind Jadhav—in quick succession. These years were also marked by labour unrest related to pay and promotions.

The three-month extension came despite the board of Star Alliance communicating to the government that it would prefer continuity in the airline, given multiple changes in the past.

“It has been a pleasure to oversee the professional and efficient fulfilment of membership requirements and conditions by the team at Air India under the astute leadership of the chairman and managing director of Air India Rohit Nandan," Calin Rovinescu, chairman of chief executive board of Star Alliance, wrote on 24 June to the aviation ministry led by Ashok Gajapati Raju.

Mint has reviewed a copy of the letter.

“We are particularly pleased to acknowledge the energy and commitment of Mr. Nandan to ensure Air India successfully integrated into Star Alliance; to that end, therefore, the chief executive board of Star Alliance believes it is important for Air India to have continuity in ensuring that the alliance promises are delivered consistently to meet expectations of alliance customers. Critical to this is a strong and effective leadership team," Rovinescu said.

Star Alliance is a group of over two-dozen airlines including Deutsche Lufthansa AG, Singapore Airlines Ltd, Air China Ltd, Air Canada, United Airlines Inc., Turkish Airlines and Thai Airways.

Star declined comment.

Interestingly, the government is also likely to showcase the Star entry of Air India as one of its achievements in its first 100-days in power, said the second government official.

Air India joined Star on 11 July, and the move is expected to increase its revenue 2-3%, the government has said.

New York-based former Jet Airways CEO Steve Forte said the airline “should be priority No.1" for the new government.

“My impression is that Mr. Modi perhaps wants to have his own person in Air India," Forte said in an email. “One who he knows he can trust regardless of the qualification. These are the risks of having political appointees rather than strictly professionals."

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Published: 13 Aug 2014, 12:51 AM IST
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