Now independent board directors push for Air India privatisation

New Delhi: The independent directors on the board of Air India seem to be pushing for privatisation of the airline and according to two different people close to developments, the directors have communicated as much to the Minister of Civil Aviation A Gajapathi Raju at a meeting earlier this month. Though nothing has been decided on the matter yet and there has been no formal resolution by the airline’s board either, the independent directors’ wish could set the ball rolling. Earlier this month, the Heavy Industries Ministry had created a flutter by classifying Air India as “sick”, reviving a discussion on whether the Government should get Air India off its hands as its financial situation is not improving despite continuous equity support. Air India’s accumulated losses stood at Rs 5,388 crore, Rs 5490 crore and Rs 7,559 crore in 2013-14, 2012-13 and 2011-12, respectively. One of the people cited above said there has been some talk of initiating the process of privatisation, by starting with two businesses which were earlier spun off from the airline - engineering and ground handling. [caption id=“attachment_2146043” align=“alignleft” width=“385”]  PTI image.[/caption] Air India Express could also be considered under this scheme, said this person. He said in a board meeting of Air India earlier in March, one independent director who is a strong votary of privatisation asked about the financial performance of Air India Air Transport Services Ltd (the ground handling subsidiary) and also about the Air India Engineering Services Ltd (the engineering subsidiary). This director said the process of disinvestment could begin with these two companies even though a third, Air India Express, could also be considered since it has been making operational profits since FY14. Independent directors on the board of Air India are: former Procter & Gamble India chief and writer Gurcharan Das; IIM Ahmedabad professor Ravindra H Dholakia, retired Air Marshal K.K. Nohwar (former vice-chief of the Indian Air Force); banker Renuka Ramnath and former director of IIT Roorkee, Prem Vrat. At least two of these directors are known to be strong votaries of privatisation. This person said a proposal was actually prepared by Air India management during the last days of the UPA regime for privatising the airline, starting with the ground handling and engineering subsidaries, but could not be carried forward after a change in Government at the Centre. This person also said Minister A Gajapathi Raju heard out the independent directors’ views on Air India’s privatisation but there has been no feedback after the meeting. Separately, Minister of State for Civil Aviation Mahesh Sharma has been said there is no move at present to privatise Air India. But the Government is keen on forming a panel to chart the future roadmap of the ailing airline and is seeking recommendations for constituting an expert panel for the purpose. Earlier, it was said to be considering stalwarts like Infosys founder Narayana Murthy, Maruti Suzuki India Chairman R C Bhargava and banker Deepak Parekh for this panel. Minister Sharma said last week he was open to suggestions on who to place on this panel and wanted the public to suggest eminent experts so that Air India could be made viable again. Besides the expert panel, the Government also has to find a suitable replacement for Chairman and MD Rohit Nandan whose term expires in August this year. Minister Sharma said earlier he was not averse to considering an industry expert for the job. Till now, AI has always had a career bureaucrat at its helm