Ashwani Lohani will be the new chairman and managing director (CMD) of state-run Air India Ltd for three years.
The appointments committee of the cabinet has approved the appointment of Lohani, an Indian Railways Service Officer of the 1980 batch, currently with the Madhya Pradesh government, the department of personnel and training said in a statement on Thursday.
Lohani has some tough tasks ahead at Air India. The national flag carrier is surviving on a R30,000 crore government bailout.
The airline, with a total debt of R40,000 crore, as on 31 March, is expected to turn around only by 2018-19.
In June, the aviation ministry asked merchant banker SBI Capital Markets Ltd to review the turnaround plan of the loss-making airline, in the backdrop of changes in the operating environment and increased competition.
Air India is expected to post a loss of Rs.3,900 crore for the year ended 31 March 2014, numbers for which have not been disclosed. It posted a loss of R5,100 crore in 2012-13 and a loss of R7,100 crore in the preceding fiscal year.
Hormuz P. Mama, an aviation analyst, was blunt in saying that Lohani may not be the right person for this position. “Howsoever brilliantly he may have managed the railways, he has no understanding of civil aviation. He is unlikely to get any freedom of manoeuvre in running Air India; or even doing what he feels is in the airline’s best interest. He’ll be compelled to operate commercially unviable services because the government wants him to,” Mama said.
However, there are dangers as well. Air India’s manpower and overheads are worrying, and optimizing these costs and changing the corporate culture will need tough political will, Mahadevan said. “Will Lohani be able to deliver on this is anyone’s guess, but my bets are on Air India continuing to remain unprofitable for many years to come,” he added.
Can a railway officer put Air India back on track? - Livemint
