The government also ruled out any possibility of privatising Air India and promised administrative and monetary steps to turn it around. Veteran Bharatiya Janata Party (BJP) MP Murli Manohar Joshi attacked the Prime Minister’s Office for the appointment of Arvind Jadhav as the chairman and managing director of Air India.
Amid noisy scenes in the House, the Air India chief was slammed by several opposition MPs for his failure to manage the affairs of the troubled carrier effectively. Joshi also criticised the government for not paying salaries to the pilots who, according to him, were leaving Air India in large numbers. Another BJP member and former civil aviation minister Shahnawaz Hussain alleged that the government was withdrawing Air India services from profit-making sectors to deliberately pave the way for the private carriers.
Communist Party of India MP Gurudas Dasgupta questioned the rationale for purchasing a large number of aircraft by the national carrier. Replying to the call-attention motion moved by Dasgupta in the Lok Sabha, Minister of State for Parliamentary Affairs V Narayanswamy earlier said the Air India had prepared a turn around plan (TAP) and a financial restructuring plan (FRP) in consultation with the financial consultant SBI Caps.
“The TAP has been formulated with an underlying new strategy to improve the market, operational and financial position significantly. The FRP broadly covers two areas relating to debt realignment and equity infusion,” he said. The TAP and FRP were presented before the group of ministers (GoM) constituted by the PMO to oversee the Air India’s affairs. The GoM referred it to a group of officers for detailed examination. Narayanswamy told the House that the entire exercise of finalising and FRP and restructuring of loans would take about three months.
Narayanswamy spoke on behalf of Civil Aviation Minister Vayalar Ravi, who was present in the House but who could not speak as he was suffering from throat infection. He said Air India’s monthly revenue collection now stood at Rs 1,100 crore, about Rs 600 crore less than the expenditure of Rs 1,700 crore.
“Out of the total daily average collections in India of Rs 22 crore, a sum of Rs 16.7 crore is being paid to oil companies, which have put Air India on cash and carry basis with effect from December 7, 2010, leaving only Rs 5.3 crore to meet repayment of aircraft loans and part of interest payment of working capital,” he said, explaining delay in payment of wages and salaries to the employees and outstanding dues to airport operators and vendors.
He said that allowances and incentive for the month of May and salary for June had been paid to the employees and the government had already released the same for July. “The government has infused a total of Rs 3,200 crore as equity in Air India,” said Narayanswamy. The carrier had not suffered any major exodus of pilots.