Air India revival: Govt on global hunt for top professionals

The government is actively considering a global search to fill in top positions at the flag carrier Air India, Civil Aviation Minister Suresh Prabhu said in an interview, according to a Press Trust of India report carried by the Mint daily. The government has been working on a package for the beleaguered airline after plans to sell a majority stake in the state-owned company failed earlier this year due to a lack of interest from bidders. The sale was key to Prime Minister Narendra Modi’s plans to help keep the fiscal deficit at 3.3 percent of GDP, a goal which is already under pressure from giveaways to farmers and other welfare benefits ahead of the 2019 general elections. The airline, which has a debt of about 550 billion rupees ($7.87 billion) according to the report, has been kept afloat for years using taxpayer funds. In the current financial year ending March 2019, the government will be spending nearly 107 billion rupees to keep the national carrier operational. Earlier this month, the government sought parliament’s approval for an equity infusion of 23 billion rupees and proposed pumping in 8 billion rupees for a special purpose vehicle set up to privatize the ground handling transport business of Air India. The report did not say which are the positions the government is looking to fill. The carrier currently has nine members on its board, with senior government officer Pradeep Singh Kharola as chairman and managing director. Once a market leader in the country, Air India has been incurring losses over the years, weighed by competition, surging fuel prices, and high cost of debt servicing. Analysts have in the past sought for the government to completely exit the carrier, saying any level of equity retention will deter investors. The struggles of the airline come despite surging travel demand in India. Air travel in Asia’s third-largest economy is growing at an annual pace of more than 20%, spurred by rising incomes and the advent of no-frills carriers. India is already the largest aviation market after the U.S. and China with domestic traffic of more than 100 million passengers.

Source: Civil Aviation Authority