Shape up or ship out: Govt to Air India

Air India will have to undergo a massive reorganisation before it gets any financial aid from the Government. That's the unambiguous message sent by the Prime Minister to the management of the national carrier. It may be recalled that Civil Aviation Minister Praful patel met Dr. Manmohan Singh yesterday to apprise him of the current troubles being confronted by the cash-starved Air India. The national carrier has delayed June salaries to 31,000 employees by two weeks as it is running short of cash. The airline has also asked top executives to forego salaries in July to help overcome the cash crunch. The Centre has asked Air India to restructure its Board and get leaner and trimmer. A panel of secretaries, headed by Cabinet secretary K.M. Chandrasekhar will review the cost-cutting exercise at Air India and the performance of the airline every month. The Government has proposed to induct independent directors on the board of the company as well. "Air India will have to do a lot of restructuring within both organisationally, financially and manpower wise. Until and unless it takes a series of measures it will be difficult to support the airline unconditionally... Air India will have to do massive restructuring for the short-term as well as long-term," Patel told reporters on Wednesday evening after the meeting with the Prime Minister.

The airline will have to give a time-bound program that will involve financial and manpower restructuring, Patel said. The Government’s rescue measures will have to be matched by extraordinary measures on the part of Air India, he added. "Air India must shape up, must become leaner and trimmer and also put its best foot forward," Patel said, adding that the state-run carrier’s plane-purchase program won’t be hampered as it needs to replace aging planes to compete. The company's revival may take as much as two years, he said. Air India’s top management may need to be recast, Patel said.