Air India turnaround blueprint in 3 months

The financial restructuring plan aims to make the carrier operationally profitable by 2015

Beleaguered by financial woes,state-owned Air India is set to ready a final blueprint of its turnaround strategy within the next three months,said bankers.

After holding a three-hour meeting with the Air India management,led by its CMD Arvind Jadhav in Mumbai,they said SBI Caps made a presentation to them. The financial restructuring plan aims to make the carrier operationally profitable by 2015.

SBI Caps was mandated last year by a consortium of lenders to thrash out a turnaround strategy for the airline.

It was the first meeting that all the lenders had with the AI management. SBI Caps and Deloitte made a presentation to us. We have to get back to them with our views. Hopefully,we will have the second meeting in 10 days, Bank of Baroda general manager Arun Tiwari told the media.

On whether they are happy with the presentation made by SBI Caps and Deloitte,Bank of Baroda general manager for wholesale banking N Ramani answered in the affirmative and added that almost 90 per cent of the proposals are fine with us and we are keen that to see the airline get back to good health. We have no problem in restructuring the entire Rs 40,000 crore debt of the national carrier because,despite challenging times,they have not defaulted on a single payment to us so far.

In the turnaround plan,Air India has set a target of enhancing its revenues by Rs 5,000 crore and trim costs by Rs 4,000 crore per annum. The plan includes equity infusion,conversion of short-term loans to long-term loans,reduction of interest rates by operationalisation of MRO and Ground Handling subsidiaries and resolving integration issues,said the airline.

Once we lenders and the company management agree on the final proposal,it will go to the government and RBI then we will have the turnaround plan rolling, said Punjab & Sind Bank general manager HP Singh.