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Separate boards replace Air-India-Indian Airlines joint management

The government on Friday night dissolved the joint board of directors of Air-India and Indian Airlines and replaced it with two separate teams with new heads.

Joint secretary in the civil aviation ministry, Anil Baijal, is the new chairman and managing director of IA. Civil aviation secretary P V Jayakrishna is the chairman of A-I.

Michael Mascarenhas, CMD of A-I, will continue as MD until further orders.

Industrial Development Bank of India chairman G P Gupta has been appointed to the board of IA and ICICI chairman K V Kamath to the A-I board.

The other new members of the two four-member boards will be nominated shortly. The ministerial representatives on the board will continue.

The decision to separate and reconstitute the two boards came with the recent decision of the joint IA&A-I board to set up a holding company with a joint management group in a bid to synergise operations of the two national carriers.

A decision by the government on the recommendations of the Vijay Kelkar committee on A-I is also on the anvil.

The Disinvestment Commission had earlier recommended divestment in A-I and its subsidiary , the Hotel Corporation of India.

On Thursday, the government made a statement in the Lok Sabha that it has no plans to merge Indian Airlines and Air-India but wants to synergise their operations. This became necessary, Aviation Minister Ananth Kumar, as there has been fierce competition between the two on metro and Gulf routes.

Kumar said the Air-India had incurred a loss of Rs 1.81 billion during 1997-98 and expected to incur a loss of around Rs 3.40 billion due to increase in expenditure on new aircraft, reduction in yield due to increased competition and cost of operations, increase in wage bill and other staff costs and lending, handling and navigational charges and depreciation of rupee value.

Air-India had taken several steps to improve the performance including higher marketing efforts and network rationalisation. The Disinvestment Commission has also recommended infusion of government equity of Rs 10 billion and induction of strategic partner to make the company viable.

Kumar acknowledged that the Indian Airlines fleet was old and needed modernisation.

He said some of the A-320 airbus and Boeing-737 craft with IA were about 15 years old, even though the average age of the fleet as a whole is about 11 years and nine months, he added.

The minister said that even an ageing fleet could be made viable through better maintenance.

He pointed out that the aircraft's age and maintenance factors accounted for only 19 per cent of the air mishaps while 62 per cent of the accidents was blamed on human error factors.

When P M Sayeed pointed out that the IA had resorted to shutting down the Cochin-Laccadives air route after the recent dornier accident at Cochin Airport, the minister said the flight in the sector would be resumed soon.

The minister told Dr Subramanian Swamy that the landing system aid and security surveillance radar at the Delhi Airport Control tower would be operational by next February. That would improve the landing safety environment in Delhi Airport considerably, he added.

Additional reportage by UNI

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