Centre may replace Jadhav after AI recast plan

The Centre might consider a successor to Air India Chairman and managing director Arvind Jadhav, once the financial restructuring plan is cleared. The civil aviation ministry has also reached a consensus to give a five-year term to the next CMD of the ailing state-owned airline.

Jadhav’s three-year term ends in May 2012 and the 1978 batch IAS officer will have a couple of months in office after the restructuring exercise. Jadhav might also become a secretary in the civil aviation ministry by mid-October 2012 and it was unlikely that he will continue as the chairman.

In the financial restructuring plan, the airline proposes to issue redeemable preference shares for Rs 7,400 crore, of the Rs 22,165 crore working capital loans, with eight per cent dividend. It is also considering steps to enable it to repay Rs 11,100 crore of loans at 11 per cent interest over a 15-year period.

Top ministry officials said Jadhav had indicated that the implementation of the restructuring plan would take at least five years and a new management team should be at the helm of affairs in the company. The airlines also has to appoint two new directors — Director (finance) and Director (Personnel).

The ministry has to approach the Appointments Committee of the Cabinet (ACC) asking for a replacement for Jadhav. However, a senior ministry official said no such move had been made. And Jadhav who was in Trivandrum on Monday has neither been told to go on leave, which is sometimes the process when a new head is nominated.

However, the airlines and Jadhav have been under fire recently from all sections. The recent jibe was from Bhartiya Janata Party spokesperson Rajiv Pratap Rudy alleging that norms were manipulated and the PMO had intervened in the process of appointing Jadhav. The BJP had said the Prime Minister should take steps to remove him from the post.

A call in attention motion has been filed in the Lok Sabha on the dwindling passenger share and poor financial health of Air India resulting in delayed payments of wages and other benefits to employees. The ministry has been asked to earmark the steps which have been taken by them to address the issues.

The airline has dues, including Rs 2,300 crore to oil marketing companies, around Rs 800 crore to airport operators and Rs 400 crore to other vendors. Various sections of employees, including pilots, have alleged the incumbent chairman of functioning in an autocratic manner.