Debt servicing is taking away a lot of money: Ashwani Lohani

With more than ₹50,000 crore in debt, India’s national carrier Air India is seriously looking to restructure its financials. Having identified the issues affecting the organisation, the carrier’s chairman and managing director Ashwani Lohani has now embarked upon fleet expansion and recruitment of manpower to put the airline back on track. Edited excerpts of an interview:

A few years ago, the government decided to inject more than ₹30,000 crore into Air India. Where was the money deployed?

About ₹22,000 crore has come in. Most of the funds have gone into paying aircraft loans. Some of that has gone into meeting interest costs.

What amount are you looking at to completely turn around the airline?

It is difficult to say. Our biggest problem is the heavy debt we have got on our head. The debt servicing is taking away so much money.

You have more than ₹50,000 crore debt. How are you going to reduce that?

The debt has to be financially restructured. Some of it can be converted into equity. There are various options we are looking at. That is the maximum I can say.

What are your fleet induction and retirement plans?

We have 15 Airbus A320 classic aircraft with us which are very old. Four of them have been grounded and 11 more have to go in two years. We will be inducting 29 to 30 aircraft this year, including 14 Airbus A320s.

Five 787s will join the fleet this year besides 10 ATRs for Alliance Air. In the next two to three years we are looking at inducting 100 planes in Air India, including our subsidiaries. Any company that is operationally a winner has to be active. If I stop, I start stagnating. Hence the need for expansion.

Are you recruiting people?

Yes. We have hired a lot of cabin crew. We are hiring pilots and other grade employees. It never happened earlier.

There is a tremendous shortage of crew.

We are now inducting people through contract. We are an aged airline. Our average age is 50 years. In the services sector, one needs to have young people. IndiGo has an average age of 30 years.

We require youngsters. Recruitment has not happened for 18 years. We need about 400 people other than pilots and cabin crew.

Some retired employees have been hired again...?

The easiest way is to take the retired person on contract for three years till the time the airline makes money. We have taken about 200 to 300 such people.

What is your plan to strengthen Alliance Air?

We have big plans for Alliance Air. Air India is a huge organisation. It is very complicated to set it right. Alliance Air is a baby. It has 10 planes. We are concentrating on Alliance Air now. It can grow like IndiGo. From 10 aircraft, it can become a 40-aircraft company in two years. It will serve the important cause of regional connectivity. I see a good future for Alliance Air. Hopefully, it will turn into profit in 2017-18. Alliance Air will have an all ATR fleet and we are building magnificent headquarters for this airline in Delhi.