Government-owned Air India has to prepare itself for a searching audit from abroad, even as it grapples with a series of top-level controversies on key appointments.
AI is tentatively supposed to join the much-coveted Star Alliance of airline networks next June. If, that is, it clears a series of audits on its internal structures and functioning, to the Alliance members' satisfaction.
However, the airline is into a big and public controversy over the recent appointments of Stephen Sukumar as chief training officer and of Pawan Arora as chief operating officer of its low-budget arm, Air India Express.
These appointments were supposed to be part of the plan for both, AI's financial turnaround and entry into the Star Alliance.
"March onwards, representatives from all the member-airlines of Star will audit the various aspects like finance, operational processes and training of employees.
To clear this audit is crucial for the airline, as it is set clear or close airline's entry into the alliance," said a senior AI official, who did not want to be identified.
Joining the Star Alliance, which has 26 carriers as members, will make AI part of a network that operates around 19,500 flights every day from as many as 1,071 airports in 171 countries.
Board reviewThe independent and government directors on the AI board had, in a meeting on Thursday, formed a two-member committee to review Sukumar's appointment.
Earlier the chief flight instructor of Lufthansa Flight Training, he was appointed AI's chief training officer in October, as part of a team selected to help the state-owned airline achieve its
turnaround plan.
Sources say Sukumar has been called to Germany on December 10, to report on AI's preparedness. The airline's training centre and procedures are at least 10 years old and need to be updated to match the alliance norms.
"If Sukumar leaves, it will be very difficult for us to match the norms set by the Alliance," added the official.
The board had also asked the management to cancel the appointment of Arora as COO of AI Express.
The appointment got embroiled in controversy after details surfaced that he had been removed from the position of test pilot by the Directorate General of Civil Aviation.
Following this, the civil aviation ministry asked the AI board to reconsider. Questions had also been raised over non-renewal of Arora's flight instructor licence.
However, AI's top management stoutly defended both the appointments.
National Aviation Company of India (Nacil), which runs AI, has also shown improvement in its financial position.
It has brought down its operating losses in 2009-10 by 39 per cent to Rs 3,472 crore (Rs 34.72 billion), from Rs 5,672 crore (Rs 56.72 billion) in 2008-09.
The net losses contracted by 23 per cent, from Rs 7,189 crore (Rs 71.89 billion) in 2008-09 to Rs 5,551 crore (Rs 55.51 billion) in 2009-10.
The airline also carried more passengers in 2009-10, improving its passenger load factor to 64.8 per cent.