The Hindu : Business : Hunt on for full time head for Indian Airlines

Online edition of India's National Newspaper
Friday, Oct 07, 2005

Business

Business

Hunt on for full time head for Indian Airlines

Vinay Kumar

Testing times ahead of the national carrier

Selection process for CMD post takes off 13 book-runners shortlisted More players to tap market

NEW DELHI: Hunt is on for the top post in Indian Airlines amidst concerns whether the airline would be able to pull through the times of fierce competition in the domestic sector, initial public offer (IPO) of capital and wage revision for employees.

The selection process for the post of Chairman-cum-Managing Director (CMD) takes off in the backdrop of the national carrier recently bagging all necessary clearances and the final nod from the Government to place orders with Airbus Industrie for a $2.2 billion deal to purchase of 43 passenger aircraft.

The airline is also working on its IPO that is expected to hit the market early next year. Thirteen bookrunners have been shortlisted. The list includes DSP Merrill Lynch, which has already bagged the mandate for the Air India IPO. Even the IPO scenario vis-a-vis the aviation sector is poised to get crowded with Air India, Air Deccan, Kingfisher and SpiceJet planning to tap the market. Jet Airways, which owns about 40 aircraft, came out with its IPO early this year when it offloaded 20 per cent on a valuation of approximately Rs. 11,000 crore. In comparison, Indian Airlines and its subsidiary Alliance Air, with a fleet of 67 aircraft are yet to undertake a valuation exercise.

Tamil Nadu-based Paramount Airways is a recent entrant in the market, while GoAir, Indus Air, Magic, and Indigo are all scheduled to launch their operations . In this scenario, Indian Airlines, under the stewardship of the acting chief, Sushma Chawla, an expert in handling finances, has been able to show a net profit of Rs. 30 crore in the first five months of her tenure. Informed sources told The Hindu that none of the 17 shortlisted senior IAS officers for the regular post of CMD as prima facie has any experience of running the affairs of an airline which is turning out to be a highly specialised job in changing times. Ms. Chawla's name does not figure in the shortlist, sources said.

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