Board may manage AI if new turnaround plan gets approved
MUMBAI: Air India will soon be managed by a board, if a turnaround plan being charted out by the government that involves financial and organisation reform is approved, a senior Air India official aware of the development said on condition of anonymity.
“The plan is to make Air India stand on its own feet so that it can be sold in future,” said the official cited above.
Major decisions at a ‘boardmanaged’ company are taken by the directors and not the promoters who are not part of the board. As such, if Air India becomes a board-managed company, it would mean less government interference in the affairs of the carrier.
Civil aviation secretary RN Choubey had earlier this week said that the government’s new turnaround plan for Air India should be cleared by Septemberend.
“We will take a call whether this can be done bilaterally between the aviation and finance ministries or whether we have to go to the cabinet for approval,” Choubey had said. A message sent to the aviation secretary on Thursday seeking details of the government’s new turnaround plan did not elicit any response.
Air India, which has Kumar Mangalam Birla and YC Deveshwar as non-official independent directors, will appoint one more independent director from the private sector in the coming days, said the official cited above.
The carrier, which was founded by JRD Tata as Tata Airlines in 1932, has had illustrious private sector officials leading it. JRD Tata remained the chairman of the airline for 25 years, while Russi Mody became the joint chairman of Air India and Indian Airlines after retiring from Tata Steel in March 1993.
During the last few years the Maharaja, as the airline is known, has been headed by bureaucrats.
The government’s attempt to privatise the loss-making carrier hit a roadblock earlier this year with the government not receiving any bids at the end of the May 31 deadline. It subsequently postponed the divestment plan citing poor investment climate on the back of rising costs of running airlines because of a rise in oil prices.