Air India gets new chief, turnaround strategy soon (Intro Roundup)

August 12th, 2011 - 8:25 pm ICT by IANS  

State Bank of India New Delhi, Aug 12 (IANS) Air India has a new chief. Arvind Jadhav was sacked as the flag carrier’s chairman and managing director Friday and Rohit Nandan, a joint secretary in the civil aviation ministry, given charge.

The government also sought to tell parliament that the national carrier, struggling to even pay salaries to its staff and has accumulated losses of more than Rs.22,165 crore, will also get a turnaround strategy soon.

Nandan is a 1982 batch officer of the Indian Administrative Service with Uttar Pradesh as his cadre. He has been in the civil aviation ministry since December 2009, which was his first posting outside his parent cadre.

“It is a challenge and a privilege to be associated with Air India,” Nandan said, soon after he was handed over the appointment letter. “Employee morale and financial health are my immediate priorities, which I will seek to improve.”

According to officials, the replacement comes in the wake of a loss of Rs.6,994 crore the carrier incurred in 2010-11, as also Jadhav’s failure to avert as many as three strikes by employees since he took charge May 4, 2009 for a three-year tenure.

Minister of State for Personnel, Public Grievances and Pensions V. Narayanaswamy told parliament Friday that Air India’s cumulative losses amounted to Rs.22,165 crore apart from a Rs.22,000 crore debt burdened to buy new aircraft.

“There are two plans under consideration — one is the turnaround plan and the other is a financial restructuring plan which is being considered by a group of ministers,” said Narayanaswamy, while replying to a calling attention motion on Air India’s woes.

“A tournaround committee will also be formed, which will include senior management and representatives from the unions,” he said in the presence of Civil Aviation Minister Vayalar Ravi, who could not speak because of a throat infection.

But Ravi told parliament in a written reply that the restructuring plan will be ready by November. These have been prepared by the State Bank of India’s financial advisory arm, SBI Caps, and are currently under study by a panel under Finance Minister Pranab Mukherjee.

“There will also be a rationalisation of loss-making routes, rescheduling of aircraft, return of leased aircraft, rationalisation of manpower and a reduction in contractual employment,” Narayanaswamy told the Lok Sabha during the debate.

The motion was called by Gurudas Dasgupta of Communist Party of India and Bharatiya Janata Party’s Murli Manohar Joshi, former aviation minister Syed Shahnawaz Hussain, Bhola Singh and Ramesh Bais.

The members, led by Dasgupta, said it was shameful that in a matter of just four years the domestic operations of the flag carrier — in the hands of Indian Airlines at that time but now merged into Air India — had also started making losses.

They also came down heavily on Jadhav, questioned his very appointment, and demanded an explanation on the rationale behind the decision taken a few years ago to buy as many as 111 new aircraft.

“More the purchase, more the booty. That is the perception,” Dasgupta said, and wondered why the government had surrendered a host of bilateral flying rights to the carriers of other countries, despite fleet expansion. “Air India is being looted by its guardians.”

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