Air India to replace chairman Arvind Jadhav

Singapore
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Air India is likely to confirm later on 12 August that its chairman and managing director, Arvind Jadhav, will leave the company.

It is not clear if Jadhav, a career civil servant, has resigned or was terminated, sources at the state-owned company said.

However, the ministry of civil aviation has come under increasing political pressure to replace Jadhav in an attempt to arrest the continuing problems at the debt-ridden airline.

The ministry is reportedly dividing the chairman and managing director roles between two officials that it will second to the airline and begin the search for a full-time replacement shortly.

Earlier this month, the country's civil aviation minister, Vayalar Ravi, attributed rising fuel prices, falling yields and high interest rates on loans as the main reason for the carrier's estimated loss of Indian rupees (Rs) 69.94 billion ($154 million) in its 2010-2011 financial year.

Ravi also revealed that the government had injected Rs8 billon in 2009-2010, Rs12 billion in 2010-2011 and Rs7.1 billion to the airline so far this year.

The country's Cabinet Committee on Economic Affairs (CCEA) has also approved an additional equity infusion of Rs12 billion for this year.

Air India is also restructuring its debt, which is estimated to be around $4 billion. This will take about three months to complete, said Ravi.

Earlier this month, Star Alliance suspended the carrier's plans to join the group and said Air India had not met the minimum membership conditions.

The airline's troubled integration with fellow state-owned carrier Indian has been cited as one of the main factors behind its problems, but Air India has also been unable to restructure its operations in order to cut costs and return to profitability.

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.

The airline has also lost significant market share over the last few years to both full service and low-cost competitors.