AI should be placed under special administration: CAPA

The Sydney-based Centre for Asia Pacific Aviation (CAPA) also warned that the unresolved human resources issues would continue to be a source of labour unrest, like the ongoing pilots' strike.

In a report released globally today, it said Air India planned to launch a low-cost carrier in the domestic market by converting its fleet of 12-14 aged Airbus A-320 planes into single-class configuration, claiming that at least two aircraft have already been reconfigured.

Observing that the airline continued to "lurch from one crisis to the next", suffering from low productivity, high costs, significant unresolved human resource issues and an unviable business model, it said, "Air India should be placed in special administration, similar to that adopted for Satyam, if any meaningful progress is to be achieved."

After Satyam's founder admitted in 2009 to a massive accounting fraud, the government stepped in to set up a new board for the IT firm. Following this, Tech Mahindra bought 46 per cent stake in Satyam which is now called Mahindra Satyam.

Regarding HR issues, CAPA said problems relating to pay, allowances and career progression have remained unresolved and "this continues to remain a source of industrial unrest going forward".

Justifying that the national carrier should be placed under a special administration, it said the management would soon experience a senior-level overhaul as 16 executive directors were due to retire over 12 months. Its board had also not been strengthened after two of its members quit.

"The new team could be faced with a highly charged and complex situation," it claimed. (More)