New chairman faces $10 billion debt

DEBT-challenged Air India has appointed Rohit Nandan as its new chairman and managing director.

It is not clear whether the former chairman Arvind Jadhav resigned or was asked to leave the company, as debts piled up.

The carrier’s debts reached Rs. 42,570 crore (US$425.7 billion) and accumulated losses of Rs. 22,000 crore ($4.9 billion) as of 31 March this year.

“My challenge would be bringing back smiles to the faces of Air India employees and [restoring the] financial health of Air India,” Nandan said.

His three-year tenure comes at a time when the government is examining a three-way proposal to help revive the carrier.

“There are three elements in the new proposal – an upfront equity infusion for immediate relief, fund infusion for covering current operating losses, and payment for meeting aircraft loan requirements. The government will take a decision on these proposals in a month,” Nasim Zaidi, secretary of the ministry of civil aviation, said.

According to the latest plan submitted to the government, Air India is seeking a total equity support of Rs. 42,920 crore ($9.46 billion) until the fiscal year 2021. It also wants government guarantees for aircraft loans worth Rs. 30,584 crore ($6.75 billion) until that period.

Both political pressure and union opposition have made it difficult to spin off its cargo, engineering and ground handling divisions that account for a large portion of its employees.