Air India begins rehaul of top deck

NEW DELHI: Crisis-ridden Air India was in for its first shake-up on Wednesday, with two of its senior directors getting reassigned, and the government ordering a probe into the recruitment of about 300 retired Air India professionals in the past three years.

The move follows civil aviation minister Praful Patel���s statement on Tuesday that the board of the national carrier, which is struggling to meet even its salary commitments, would be overhauled and that ���some heads would roll���.

Directors Anup K Srivastava (personnel) will now oversee the integration and wage-related issues of Air India and the erstwhile Indian Airlines, while S Chandrasekhar (finance) will look after the restructuring plan being worked out by SBI Caps.

People close to the development told ET that, in effect, the reassignment puts these two board members lower in the pecking order.

���The plan is to gradually ease out some of these officials,��� the person said requesting anonymity.
The company board will have to take the approval of the Appointment Committee of the Cabinet (ACC) before the removal of a director.

The government is also planning to appoint seven independent directors on the board, besides setting up an international advisory committee. This new panel will have members comprising top aviation leaders from the world, and will supplement the work of the airline management.

The ministry has approached Tata Group chairman Ratan Tata to head the panel.

���Starting today, restructuring of the airline will be done in the next 30 days,��� minister Mr Patel said on Wednesday, adding that the role of existing board members are being worked out.

The carrier is facing the worst crisis in its 60-year history. The airline deferred the June salary of its 31,000 staff by 15 days on account of poor cash position. It also asked its top managers to forego the July salary, a practice followed by many airline executives in the world. Till March 31, 2009, the airline has an accumulated loss of Rs 7,200 crore.

The restructuring by the top management, however, does not have a complete buy-in amongst employees. ���There are too many things being done at the same time. The management is talking of a wage cut, voluntary leave scheme, or a voluntary retirement scheme at the same time leading to confusion. This has left airline employees either demotivated or hostile which would have a bearing on the operation,��� an airline executive said on the condition of anonymity.

High fuel price, in the first half of last year, coincided with economic slowdown and swine flu, and has broken the backbone of most of the air carriers across the world. Over 30 airlines have gone bust in the past one year.