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AI CMD vows to improve airline efficiency and bring down cost

Author: IANS/Tuesday, January 9, 2018/Categories: Aviation

AI CMD vows to improve airline efficiency and bring down cost

New Delhi, Jan 8 - National passenger carrier Air India's new chief Pradeep Singh Kharola on January 8 said his priority would be to improve the airline's efficiencies and to keep a tab on cost.

"My mandate is to manage the airline, provide good services, improve efficiencies and keep a tab on cost," Kharola said at the airline's New Delhi-based headquarter Airline House.

According to Kharola, the airline will forthwith focus on providing better services to the "Business Class" passengers, along with commencing some more direct connections to the US and Australia.

The airline might commence operations on New Delhi-Los Angeles sector in a "few months" time and add some more capacity on the routes operated to Australia.

Kharola disclosed that frequencies will be added after the company receives new Boeing 777s by February 2018. The airline is expected to receive three Boing 777 aircraft, out of which -- two planes -- will be solely used for VVIP transportation.

On the financial front, Kharola pointed out that the company has improved its revenue during April-December 2017 period by 10% on a year-on-year basis.

The senior bureaucrat took charge as Air India CMD on December 11, 2017, before which he was the Managing Director of the Bengaluru Metro. 

Kharola replaced Rajiv Bansal, Financial Advisor to the Petroleum and Natural Gas Ministry, and also holding additional charge of Air India CMD.

Kharola's mandate becomes difficult given that a ministerial group has been formed to look into the modalities of Air India's divestment process.

The Air India-specific Alternative Mechanism, headed by Union Finance Minister Arun Jaitley, has been mandated to guide the strategic divestment process and to decide on key issues such as treatment of the airline's debt and hiving-off of its assets.

The demerger and strategic divestment of its three profit-making subsidiaries, the quantum of disinvestment and the universe of bidders is also on the group's agenda.

Recently, the government appointed consultancy firm EY as the transaction advisor for the strategic divestment.

Till now budget passenger carrier IndiGo has evinced interest in buying the airline's international operations and its subsidiary Air India Express. 

In addition, aviation industry majors SATS, Bird Group and Celebi have shown interest in buying Air India's ground handling unit.

Currently, the airline is under massive debt burden of Rs 50,000 crore, had posted an operating profit of Rs 105 crore in 2015-16.

For the last fiscal (2016-17), the company was expected to report an improved operating profit margin.

The national flag carrier in April 12, 2012, got a new lease of life when the then UPA government had approved a Rs 30,000-crore turnaround and financial restructuring package spanning up to 2021.

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Kavita Giridhar Mallya

IANS

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