The Hindu Business Line : International advisory board to help AI chart a new course

New Delhi, July 9 In addition to Mr Ratan Tata, the retiring CEO of Lufthansa and the ex-Chairman of Singapore Airlines (SIA) may be soon asked to help Air India chart a course through the current troubled times.

The soon-to-be created seven-member International Advisory Board is likely to be headed by Mr Ratan Tata, Chairman, Tata Group. The Board is expected to “advise and give directions” to the state-owned airline on international best practices.

The idea of having an international advisory body is being proposed as there could be a clash of interest, if the global airline executives are made board members and asked to report to the AI management.

Independent directors

The airline also plans to have independent directors on its boards. It has approached telecom technocrat Mr Sam Pitroda and the TCS Chief Executive Officer, Mr S. Ramadorai, and is also looking to induct experts from the fields of finance, law, hospitality and IT as independent directors.

The airline, which posted a loss of Rs 5,000 crore, is working on a business and a financial plan to improve its functioning. National Aviation Company of India Ltd (NACIL), the company created through the merger of Air India and Indian, is putting in place a plan for the next six, 12, and 18 months for introducing cost reduction and improving revenue generation.

The airline is considering complete rationalisation of manpower and productivity-linked incentives, review of agreement on technical and operational matters, return of leased aircraft, large scale redeployment of staff to curb in fructuous expenditure and close all overseas offices where NACIL does not operate.

The Government also plans to support the airline through a series of measures, including the Finance Ministry issuing orders requiring all Government servants to travel on Air India on their official travels.

Star factor

A committee of Secretaries headed by the Cabinet Secretary has been set up to closely monitor the turn around programme of NACIL.

The international airline senior management executives scheduled to join are coming from Star Alliance, the global airline alliance that Air India is to join later this year. Air India already has close relations with Lufthansa which is pushing for the state-owned Indian carrier to join the Star Alliance. Besides, Air India has recently set up its hub in Frankfurt, one of the largest bases of Lufthansa.

Air India currently has a fleet of 150 including 45 leased aircraft and a staff strength of 31,500, which gives it a staff to aircraft ratio of almost 210, almost double of the globally accepted industry standards.

Related Stories:
Air India turnaround panel gets cracking
Air India joins club seeking Govt support
Air India plans to search globally for a COO