AI Express COO issue may hit AI board meet
NEW DELHI: Crisis-ridden Air India is likely to witness a stormy board meeting in Mumbai on Wednesday. The airline management's decision to continue with Pawan Arora as the chief operating officer of Air India Express despite the board recommending his removal last November is likely to spark some serious fireworks.
Before the board meet, aviation minister Praful Patel will review the airline's functioning and he will meet the independent directors too ^ who are not learnt to be happy with the way the compnay is being run. The board will consider AI's demand to lease 10 Airbus A-330s and an equal number of A-320s and its overall restructuring plan.
The government has been reviewing AI working over the past week as the airline is getting Rs 1,200 crore and a demand has been raised for an additional Rs 2,000 crore next fiscal.
"AI's equity should be close to Rs 5,000 crore in two years with Rs 2,000 crore and Rs 1,000 crore expected over next two fiscals. The working capital loan and aircraft debt of Rs 40,000 is planned to be restructured in a way that the liability reduces to half. So, we are looking at a DE ratio of 5:1, a safe bet for the airline's survival," said sources.
AI's restructuring plan will also be discussed on Wednesday's board meeting. "It's one thing to have a good plan and another to implement it," said a worried official.
But given the airline's stand on Arora known to be close to AI COO Gustav Baldauf, this issue could well dominate the proceedings. Arora's removal was recommended after the board found some of the things he had claimed in his resume were not found to be true. "The board recommendation should have been accepted. The government is pumping money to save Air India and the management should not adopt such a stand," said a top ministry source.
Before the board meet, aviation minister Praful Patel will review the airline's functioning and he will meet the independent directors too ^ who are not learnt to be happy with the way the compnay is being run. The board will consider AI's demand to lease 10 Airbus A-330s and an equal number of A-320s and its overall restructuring plan.
The government has been reviewing AI working over the past week as the airline is getting Rs 1,200 crore and a demand has been raised for an additional Rs 2,000 crore next fiscal.
"AI's equity should be close to Rs 5,000 crore in two years with Rs 2,000 crore and Rs 1,000 crore expected over next two fiscals. The working capital loan and aircraft debt of Rs 40,000 is planned to be restructured in a way that the liability reduces to half. So, we are looking at a DE ratio of 5:1, a safe bet for the airline's survival," said sources.
AI's restructuring plan will also be discussed on Wednesday's board meeting. "It's one thing to have a good plan and another to implement it," said a worried official.
But given the airline's stand on Arora known to be close to AI COO Gustav Baldauf, this issue could well dominate the proceedings. Arora's removal was recommended after the board found some of the things he had claimed in his resume were not found to be true. "The board recommendation should have been accepted. The government is pumping money to save Air India and the management should not adopt such a stand," said a top ministry source.
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