Air India restructuring plan by 25 July

New Delhi: Air India, the country’s largest carrier by fleet size that is run by National Aviation Co. of India Ltd, plans to submit a fresh restructuring plan running over the next two years to a committee of secretaries on 25 July, setting the road ahead for the financially stressed airline, according to senior executives at the state-run firm and civil aviation ministry officials.
The plan sets six-month milestones for operations, they added.
Under increasing pressure to seek funds, after debt obligations became equal to revenues, Air India was asked by Prime Minister Manmohan Singh late last month to prepare a road map for a return to profitability in exchange for equity infusion from the government and other financial support, after the national carrier approached the government for help.
“It will be presented to the committee on 25 July,” a ministry official, who asked not to be named, said of the restructuring plan under preparation.
The committee is headed by cabinet secretary K.M. Chandrasekhar, with members including finance secretary Ashok Chawla, civil aviation secretary Madhavan Nambiar, and T.K.A. Nair, principal secretary to the prime minister.
Air India’s chairman and managing director Arvind Jadhav has already asked heads of businesses such as cargo and engineering at the company to contribute to a new business plan, a senior company executive said.
These heads are expected to make a presentation to Accenture Ltd, SBI Captial Markets Ltd and Jadhav next week before finally submitting it to the government on the weekend.
Management consultant Accenture was engaged to help the merger of erstwhile Air India Ltd, an airline that mostly flew foreign skies, and erstwhile domestic carrier, Indian Airlines Ltd into Nacil, as the company running the Air India service today is called in short.
SBI Capital has been engaged as financial counsel for the current round of restructuring.
17/07/09 Tarun Shukla and P.R. Sanjai/Livemint

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Categories: NACIL Jul 2009