NACIL to get new chairman

The state-owned National Aviation Company of India Ltd (NACIL) will soon have a new chairman and managing director as the present incumbent, Raghu Menon, is all set to get a new assignment.

Menon, a 1974-batch IAS officer, had joined NACIL as its CMD on April 1, 2008 and would have completed his tenure at the end of September 2011 in the normal course. NACIL was established in 2007 after the merger of Air India and Indian Airlines.

It is not yet clear what Menon’s new assignment will be or who will be his successor at NACIL.

Official sources said one possible assignment for Menon could be the chairmanship of the proposed airport regulator, Airport Economic Regulatory Authority. Parliament has already passed a Bill for the creation of the regulatory body.

In the normal course, a decision on appointing a new CMD for NACIL can be taken only after the formation of the new government at the Centre. Official sources, however, said that a high-level meeting in the government had been convened for Friday to take a quick decision on the top-level change.

Menon’s departure from NACIL much before the end of his tenure is likely to surprise aviation industry observers.

Civil Aviation Minister Praful Patel had backed Menon’s appointment overruling claims of several other candidates.

Prior to taking charge of NACIL, Menon was special secretary and financial advisor in the Ministry of Civil Aviation. He succeeded V Thulasidas, also an IAS officer, who completed his tenure as NACIL CMD on March 31, 2008.

Official sources, however, explained that not all was well between Menon and the civil aviation minister in the last few months. Menon was believed to be not too comfortable with the manner in which the civil aviation ministry was trying to enforce its wishes on the state-owned airline. Menon, an IAS officer from the Nagaland cadre, had a long uninterrupted stint in the civil aviation ministry from 2002 to April 2008, before taking over as the NACIL chief.

In the last few weeks, NACIL has taken an aggressive stance by not raising fares and even effecting a 70 per cent cut in fares on routes connecting Tier-II cities in the country. This move was initiated at a time when most other domestic airlines were raising fares in the wake of a rise in aviation turbine fuel prices.

In 2007-08, NACIL was reported to have incurred a loss of Rs 2,000 crore, much higher than the Rs 722 crore loss incurred in 2006-07.