Arora's appointment two months ago had raised eyebrows

Air India has sacked Pawan Arora, the Chief Operating Officer of its subsidiary Air India Express.

The board of directors, which met here on Thursday, decided to ‘dispense with' the services of Mr. Arora, whose appointment about two months ago had raised eyebrows.

The board also examined the issue of top-level appointments in Air India Express, official sources said.

The meeting decided to set up a committee to study the procedural aspects of Stefan Sukumar's appointment as the carrier's Chief of Training. The board directed that a report be submitted within two weeks. It approved the appointment of Kamaljeet Rattan as the Chief Information Officer, the sources said. The appointments of Mr. Arora and Mr. Sukumar at huge salaries in the cash-strapped national flag carrier were backed by Gustav Baldauf, Air India's Chief Operating Officer.

The meeting was attended by three independent directors — the former Chief of Air Staff, Fali Homi Major; FICCI Secretary-General Amit Mitra and Harsh Neotia of the Ambuja Group.

The appointments of Mr. Arora and Mr. Sukumar in September-end led to a controversy as reports talked about their not fulfilling the minimum requirements for the key posts. Mr. Arora had earlier worked with Jet Airways and Kingfisher after leaving the Indian Air Force. It was reported that he did not qualify as the flight operations instructor in the Directorate-General of Civil Aviation (DGCA).

Mr. Sukumar's selection as Chief of Training came under scrutiny amid reports that he was an instructor for Airbus A-300 and A-310 aircraft, both of which are not in Air India's fleet which is dominated by Boeing B-777s and Airbus A-320s. According to DGCA rules, an airline's training chief should be an approved examiner on the type of aircraft which is in the fleet and should be a permanent employee of the airline and not on contract. In case the airline has a mixed fleet, the training in-charge should be a DGCA-approved examiner on aircraft type of the highest category in the fleet. Air India unions had also opposed these appointments, not only on procedural grounds, but also on the “huge” salaries they were offered at a time when the carrier was delaying payment of salaries and allowances to its employees.

About a fortnight ago, four independent directors of the Air India board discussed the airline's financial condition and the recent controversial top-level appointments with Principal Secretary to the Prime Minister T.K.A. Nair.

The board also approved the sale of four 20-year old Airbus A-310 freighter aircraft and decided to release their crew and engineering manpower for new types of aircraft.

Single code

The meeting also took note of the implementation of an IT platform for Air India which would provide a single code for the merged carrier. The codes have been different for the two erstwhile carriers — ‘IC' for Indian Airlines and ‘AI' for Air India, so far. A single code and upgrading of the IT platform is an essential requirement for the national carrier joining the global grouping of premier airlines — the Star Alliance.

The Board approved the audited financial results for 2009-10, which showed that Air India's losses have come down by 23 per cent to Rs. 5,551 crore in 2009-10 from Rs. 7,189 crore in the previous financial year. The operating loss came down by 39 per cent at Rs. 3,472 crore in 2009-10 from Rs. 5,672 crore in the previous fiscal. The passenger load factor rose to 64.8 per cent in 2009-10 from 59.5 per cent in the previous year.

As a result of several cost-cutting measures, the airline's total expenditure decreased by eight per cent from Rs. 20,668 crore to Rs. 19,035 crore, though its total revenue remains almost stagnant, the official figures showed. In the first six months of this financial year (2010-11), the passenger load factor went up by 8 per cent to about 67.1 per cent while the passenger revenue was at Rs. 1,034 crore.

In the backdrop of declining losses, the airline expects the government to consider infusing a further equity of Rs. 1,200 crore, after having pumped in Rs. 800 crore in February. The second tranche of government funds, to be released after a nod from the Cabinet Committee on Economic Affairs, is likely to be used for settling outstanding dues and not to enhance the airline's equity base.

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