The appointments committee of the Cabinet (ACC) on Friday appointed Rohit Nandan,a joint secretary in the aviation ministry,as chairman and managing director (CMD) of Air India for three years. The outgoing CMD,Arvind Jadhav,has been repatriated to his parent Karnataka cadre. The government has decided to hand over the reins of Air India to Nandan at a time when the airline is going through its worst financial crisis. The new CMD happens to be an Indian Administrative Service (IAS) officer like his predecessor. In fact,Nandan is the third consecutive IAS oficer to head Air India in the last four years. "We would seek co-operation from employees and address the disconnect between them and the management. The priority would be to build the second and third line of leadership in the organisation. It would be ensured that losses go down and revenue increases," Nandan told FE after taking charge at the airline. Nandan is a 1982-batch IAS officer of the Uttar Pradesh cadre. An avid reader and soft-spoken officer,he has been in the civil aviation ministry since December 2009,his first posting outside his parent cadre. Before joining the civil services,he taught modern history at Allahabad University. Leading Air India would not be easy for the new chief as he would not only have to work for operational and financial performance but also have to change the image of the carrier. The state-owned airline has come under attack for its poor product and services and has been losing market share to private carriers. Air India is in so deep a crisis that nobody wants to head the airline. According to aviation ministry sources,several candidates approached by the government to head the airline opted out. Even Nandan is believed to have been very hesitant to take the assignment and accepted the offer only after several rounds of counseling. The new CMD would also have to change the perception that bureaucrats cannot run a service-oriented commercial organisation. The government had named Arvind Jadhav as CMD of Air India in May 2009 in a hurry and in the middle of general elections arguing that the then chairman Raghu Menon (now information and broadcasting secretary) had failed to solve airline's problems. But now Jadhav has also been removed for allegedly not addressing the employee problems and reduce losses. Sections of airline employees have thrice gone on strike causing a loss of over R200 crore to the airline. "It (removal of Jadhav) appears to be a show of the minister. The organisation needs to take tough decisions and bring structural change," a former Air India board member said. Air India's finances have deteriorated over years and the gap between its revenue and the cost has widened. The airline currently incurs a daily loss of about R23 crore. The total accumulated loss is estimated to be R22,000 crore. Due to poor cash flow the airline has defaulted on the payments of fuel bills,salaries and interest on working capital loans. The government has been providing financial assistance to the carrier to ensure it stays afloat. It has so far infused an equity of R3,200 crore into the airline. The new management would have to make a business case which is commercially viable, Centre for Asia Pacific Aviation (CAPA) India head Kapil Kaul said.
