Praful Patel reviews steps to restructure Air India

New Delhi, Jan 15 (PTI) Weeks after the Indian government
decided to infuse additional equity of Rs 1,200 crore in Air
India, steps taken by its management to restructure the
national carrier came in for a thorough scrutiny by Civil
Aviation Minister Praful Patel here today.
Apart from its financial restructuring, the Minister is
understood to have reviewed the progress in implementation of
cost-cutting measures by India's national carrier top-brass in
varied fields -- ranging from the upkeep of its lounges and
ground handling to crew shortage.
This was the fifth meeting Patel had with Air India
officials in the past three months to undertake micro-
management of the airline's restructuring process.
Sources said the financial restructuring plan prepared by
consultancy firm Deloitte Touche Tohmatsu India Limited came
up for a detailed scrutiny at the meeting, which was also
attended by Civil Aviation Secretary SNA Zaidi, Air India CMD
Arvind Jadhav and Chief Operating Officer Gustav Baldauf.
The review came ahead of the presentations the management
would make before Air India Board on Wednesday next and later
to the Finance Ministry and the Board for Reconstruction of
Public Sector Enterprises (BRPSE) to justify its claims for
government funding.
The progress in making the airline's Strategic Business
Units functional was also reviewed at the meeting, the sources
said. The SBUs would be separate profit centres which would
independently handle activities like ground handling,
maintenance, repair and overhaul, and engineering.
The Minister also asked the airline management what steps
it had taken to overcome the shortage of both cabin and
cockpit crew, which has led to several flights being delayed
or cancelled in the past few weeks, the sources said.
The full board of Air India would meet next week to review
the proposals of ICICI, Standard Chartered and SBICaps to
refinance the airline's USD 1.15 billion loan, given by a
consortium of banks led by IDBI, to fund acquisition of 21
Airbus A-321 aircraft.
Air India has been trying to find ways to lower interest
rate on this loan by at least two per cent by securing
government guaranteed convertible bonds, an issue on which the
Finance Ministry is likely to take a final decision.
The ailing national carrier has been asked by the BRPSE to
come up with a financial restructuring plan to drastically cut
losses.
Air India has been working on details for a revival
package, which would have to be vetted by the BRPSE, which
recommends steps to the government and the concerned loss-
making state-run unit on ways in which it could strengthen,
modernise and review itself.
After getting a cash infusion of Rs 1,200 crore in
December, Air India, which has accumulated losses over Rs
5,500 crore, is likely to seek another Rs 2,000 crore worth of
equity infusion in the next financial year. PTI ARC
ASR