Air India gets new interim chief

25 Apr 2009,

NEW DELHI: Unhappy with the performance of state-run carrier Air India, the government has decided to appoint an interim chairman and managing director for the carrier in place of incumbent Raghu Menon, officials confirmed on Saturday.

A list of names has also been forwarded to the Appointments Committee of the Cabinet for a regular chief to run the National Aviation Company of India Ltd, which was formed last year after Indian Airlines was merged into Air India, they added.

In the interim, Menon, an officer of the Indian Administrative Service (IAS), is being replaced by another officer from the service, E.K. Bharat Bhushan, who currently serves as joint secretary and financial adviser in the civil aviation ministry.

The decision was taken after a high-power meeting here Friday chaired by Cabinet Secretary K.M. Chandrasekhar and also attended by Principal Secretary in Prime Minister's Office T.K.A. Nair and Civil Aviation Secretary M. Madhavan Nambiar.

"Mr. Menon may be considered for the new regulatory authority for the sector. He is currently on leave," a senior official in the ministry said, referring to the proposed Airports Economic Regulatory Authority.

Bharat Bhushan will continue to serve as joint secretary and financial adviser.

"The new full-time chairman and managing director will be appointed anytime. It could happen even before the new government takes over," a spokesperson for the ministry said.

The change has come in the backdrop of falling market share of the state-run carrier even though it is going through a major fleet expansion programme to induct 111 new Boeing and Airbus aircraft over the next few years.

The company has already sought Rs.2,500 crore from the government in the form of equity and soft loan to finance the fleet expansion - 68 aircraft from the US manufacturer and 43 aircraft from the European consortium.

Officials said the merger between Air India and Indian Airlines, with the stated objective of greater operational synergies, has also not been smooth, delaying the carrier's bid to join the Star Alliance, the leading global interline pact.

A new role for Menon will be decided soon, even though his immediate predecessor at Air India, V. Thulasidas, is also said to be in contention for the top post at the new aviation regulatory authority.