The board of Air India has asked the loss-making national carrier to completely rework its turnaround plan and seek feedback from its
employees in order to minimise opposition from them. The board also decided that the plan’s implementation would be overseen by a group of four newly-appointed independent directors, industrialists Anand Mahindra and Harsh Neotia; Amit Mitra, the secretary general of industry body FICCI and a former chief of the Indian Air Force, Fali Major.
On Tuesday, the new board also approved the appointment of Gustav Bauldauf, formerly of Austrian Airlines, as the chief operating officer for the airline and said the new directors would head a number of crucial board-level committees. The audit committee will be headed by Mr Neotia, while one dealing with finance will be jointly headed by Mr Neotia and Mr Mahindra. Another committee dealing with the problems arising out of the amalgamation of Air India with Indian Airlines, will be headed by Mr Mitra and Air Chief Marshal Major.
“Everything that has been proposed in the previous turnaround plan is under review,” said Air India’s CMD Arvind Jadhav, at a press conference after the board meeting. “There will be changes and the plan will be taken to the employees after it is approved by the board. We are targeting sharing of issues in this turnaround plan with the employees,” Mr Jadhav said.
The government recently appointed these directors to improve the working of Air India as the government-owned airline struggles to come up with a credible business plan to take advantage of an expanding economy as more and more travellers take to the air shunning cheaper alternatives such as trains.
Air India lost as much as Rs 5,000 crore in fiscal for the year ended March 31, 2010. It has debt of Rs 16,000 crore and is counting on the government to bail it out by infusing equity. The government had invested Rs 800 crore of equity in the past fiscal. It has approved a future Rs 1,200 crore in this financial year, but on condition that the airline come up with a turnaround plan targeting more revenue generation from operations, cost-cutting and enhancement of earnings potential through strategic businesses in airline operations and maintenance.
The board also reviewed Air India’s information technology upgrade plans. The airline had signed a contract with air transport and communication and information technology solutions company, SITA, a couple of months ago. The board has said this must be done within 300 days.
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