Lifeline won’t do, AI requires surgery: GoM

New Delhi: Even after the central bank-approved debt recast plan for Air India (AI), there are doubts within the government on whether the airline can be saved without significant workforce reduction and eventual privatisation.
On Monday, a lenders’ consortium led by State Bank of India cleared a plan to convert loans worth R6,500 crore into equity. However, minutes of the group of ministers (GoM) that must clear the recast plan bare fault lines within the government.
Planning Commission deputy chairman Montek Singh Ahluwalia made a strong case for writing off AI’s debt. He said without a write-off and rationalising manpower, it would be tough to implement the restructuring plan. Striking an even harsher note, petroleum minister Jaipal Reddy favoured privatising Air India at some time in the future.
The only minister at the GoM headed by finance minister Pranab Mukherjee who favoured the status quo was aviation minister Vayalar Ravi. He suggested giving a “fair chance” to the suggestions, including injecting government money into AI.
30/11/11 Ashish Sinha/Nirbhay Kumar/Financial Express

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Categories: Air India Nov 2011