Thaindian News

Mumbai/New Delhi, April 6 (IANS) In a bid to bring about a turnaround in the ailing national carrier, Gustav Baldauf, Austrian Airlines’ executive vice-president, flight operations, was Tuesday appointed chief operating officer (COO) of Air India.
Baldauf’s appointment was decided at a meeting of the board of directors of the National Aviation Company India Ltd (NACIL) - which operates Air India - at its Mumbai headquarters.

NACIL also formed four committees - one each for human resources, audit, strategy and finance. These committees will give their reports on the turnaround plan for the airline in the next 30 days, a senior Air India official said after the meeting.

Air India had shortlisted three candidates for the post of COO. Besides Baldauf, those in the running were Brock Friesen, COO of Air Malta, and George Reeleder, managing director of Rapidair - a domestic service of Air Canada. The three were chosen from 140 applicants for the post.

Baldauf, the first ever COO of the airline, will have the task of salvaging Air India’s fortunes in the next three years. He had worked with Jet Airways as its vice-president for flight operations earlier.

It may be mentioned here that Austrian Airlines, the current workplace of Baldauf, is a member of Star Alliance, which Air India is expected to join.

While Amit Mitra, secretary general of the industry lobby Federation of Indian Chambers of Commerce & Industry (FICCI), will head the HR committee, Anand Mahindra, vice-chairman and managing director of Mahindra & Mahindra, will steer the committee on audit and finance.

“This is a part of airline’s initiative for a turnaround plan focusing on on fleet and manpower rationalisation, route profitability, and structural changes,” said the official.

The plan envisages benefits of Rs.1,911 crore. But Civil Aviation Minister Praful Patel recently told parliament that these initiatives taken by the airline will only result in savings of Rs.753 crore in fiscal 2010-11.

According to the minister, the national carrier is expected to incur losses of around Rs.5,400 crore this fiscal and the trend is likely to continue for a few more years.

“With the expected losses of Rs.5,400 crore in 2009-10, the carrier’s losses will mount to over Rs.13,174 crore in three straight fiscals. The carrier had incurred a loss of Rs.2,226.16 crore in 2007-08 and Rs.5,548 crore in 2008-09,” he had told the Rajya Sabha last month.

The airline has also cut excess capacity and is currently carrying out an exercise to pare loss-making routes. The airline is waiting for a cabinet nod to raise its working capital by Rs.1,000 crore. Currently the airline’s working capital is Rs.17,000 crore.

It recently received the government’s sanction for an equity infusion of Rs.800 crore with a provision of an additional Rs.1,200 crore in the next fiscal. It has also raised over Rs.700 crore from bonds for aircraft acquisition.

In February this year the government approved equity infusion of Rs.800 crore for the ailing carrier in two instalments to tide over the cash flow problem and finance fleet acquisition plans.