Thaindian News

New Delhi/Mumbai, March 1 (IANS) A day after national carrier Air India’s chief operating officer Gustav Baldauf resigned, company officials said Tuesday his quitting will not affect the embattled airlines’ turnaround plans.

“It is true that he was brought in for the turnaround plans, but his departure won’t have any bearings on the plan which will be considered by the board sometime this month,” a senior Air India official, who did not wish to be identified, told IANS from Mumbai.

According to him, Baldauf was given a show-cause notice last week over his comments in which he alleged that the government was excessively interfering in his job.

“He had problems in adjusting to the environment in which a public sector company like Air India works; we have many considerations while running it like unions, and seeking permissions from the government,” the official said.

Air India last year hired four officials on key positions on exorbitant salary scale for an airline in financial trouble, including Baldauf, who had earlier worked with Jet Airways and Austrian Airlines, to work on and implement the turnaround plan for the cash-strapped airline.

Baldauf, further recommended hiring of chief training officer Stephen Sukumar and Capt. Pawan Arora, chief operating officer of the company’s low-cost international arm Air India Express. Both have recently left Air India.

“Their hiring did raise eye-brows, especially with the unions who, from day-one after hearing their pay scales, started demanding their ouster due to the company’s financial condition,” the official said, adding that the airlines’ independent directors also were not satisfied with the new appointees.

Baldauf was appointed at an annual salary package of Rs.3 crore to implement a three-year turnaround plan.

Meanwhile, the aviation ministry is likely to set up a committee to look into the human resources issues of the airline.

Air India had reported a decrease in its net loss for the fiscal 2009-2010, which stood at Rs.5,551 crore as against a net loss of Rs.7,189 crore in the fiscal 2008-2009.

The company also has losses of over Rs.15,000 crore and annual interest payment of Rs.1,800 crore on a debt of over Rs.40,000 crore, which was taken to cover up the working capital debt and the rest to buy aircraft.

On Monday, the government further infused Rs.1,200 crore in the National Aviation Company of India Limited, the parent company of the brand Air India, in the federal budget 2011-12.

“As a part of the process for financial restructuring of National Aviation Company of India Limited, an amount of Rs.1,200 crore has been provided,” Finance Minister Pranab Mukherkee said in his budget speech.

Earlier, the central government had infused Rs.2,000 crore of fresh equity in the flag-carrier in 2010 in two instalments of Rs.800 crore and Rs.1,200 crore.