With Air India slipping deep in huge losses, the government has finally made up its mind to go in for a major revamp in the management of the State-owned carrier , top government sources indicated here on Wednesday.
After a meeting with Civil Aviation Minister Vayalar Ravi and Civil Aviation Secretary Nasim Zaidi, Prime Minister Manmohan Singh is learnt to have directed them to manage the national carrier professionally and try and get a professional to head it. The much-needed Air India revamp, with a new Chairman-cum-Managing Director (CMD) as well as eminent persons on its board as independent directors, is likely to be announced in a day or two, the sources said.
The Prime Minister was also unhappy with the management's failure to pay salaries in time for the past two months even as the government cleared Rs.1,732 crore to be paid to the carrier — Rs.1,200 crore as equity infusion and Rs.532 crore on account of dues for operating VVIP flights. Air India is incurring losses of Rs.600 crore every month, official sources said.
The sources said the Civil Aviation Ministry is already working overtime to find a new CMD who can instil a sense of confidence among employees and take them along as the cash-strapped airline grapples to tide over the worst financial crisis.
The present incumbent's style of functioning, sources said, has fuelled dissatisfaction among the employees and failed to integrate them into one large family. His three-year term ends in May 2012, but chances are that a change of guard at the top is very much on the cards. So far, the sources said, three bureaucrats have declined the offer to accept the top job of steering Air India out of the mess.
Over the past few days, CPI leader Gurudas Dasgupta met Dr. Singh, apprising him of the hardships being faced by the employees and mismanagement of the carrier.
In the past two years, Air India witnessed three strikes by its employees and pilots.
“Post-merger woes, after coming together of Air India and Indian Airlines three years ago, are still continuing. Air India has missed the date for joining the global Star Alliance, it has huge loans to service and the confidence of employees is at an all time low, with a sense of drift gripping them in absence of a purposeful and dynamic leadership that takes care of the management,” the sources said.
Air India needs a total equity support of Rs. 42,920 crore, of which Rs.6,600 crore is needed to provide immediate relief. The government injected equity of Rs.2,000 crore in two instalments in 2009-10 and approved yet another tranche of equity to the tune of Rs. 1,200 crore a few days ago. Air India's total operational fleet, including both narrow-body and wide body aircraft, is 125, whereas 25 aircraft have been rendered non-operational. It also has eight freighters in its fleet.
In the past two years, Air India has closed 13 of its offices abroad in a bid to save about Rs. 5.28 crore a year. The carrier owes Rs.2,300 crore to the public sector oil companies that have put it on notice and implemented cash and carry model. As against an average utilisation of aircraft for about 11.30 hours daily by private airlines in the country, Air India clocks about 10 hours.
The manpower per aircraft in Air India is 263, whereas it is 150 in Jet Airways, 59 in Jetlite, 111 in Kingfisher, 118 in Spcejet, 185 in Go Air and 102 in IndiGo. The passenger load of Air India has also declined in the last two years due to an overall recession that followed a hike in the price of aviation fuel.
Air India recorded passenger load factor of 70.6 per cent in domestic and 64.8 per cent in international flights during 2010-11. In the same period, Jet Airways recorded domestic passenger load factor of 75.2 per cent and on international routes it was 80.6. The figure was 80.7 per cent and 75.6 per cent for Kingfisher for domestic and international sectors respectively.
