By Abhijit Neogi, CNBC-TV18

The new man in the cockpit of Air India, Raghu Menon wants equity infusion from the government to support the ambitious expansion plans of the merged airline. As he takes off, Menon promises to enhance productivity and even hints at a VRS option.

Beleaguered national carrier Air India's CMD designate Raghu Menon says his first challenge will be to take the carrier out of its financial mess. Infact he may approach the government for equity infusion and expansion of the company's capital base. The combined entity has reported a loss of Rs 700 crore in ‘06-‘07 and the government is apprehensive that in ‘07-’08, the accumulated losses could even breach the 1000 crore mark

Raghu Menon, CMD Designate, Air India said, “We may approach them for a fresh equity infusion - this is not a bailout. But as for the IPO its still premature, we are yet to take a call'

The new CMD also expects to complete at least 60-70% of the merger in ‘08-‘09 and complete the process in the next two years. But taking the company out of the financial mess is no easy task. Menon says he his effort will be on enhancing productivity through route rationalisation, improving passenger load factors and yields and cutting down flab. The merged entity's employee strength stands at 30000 and VRS could be on the cards

Menon said, “The Board has to take a call on VRS. Let a proposal come and we will try to implement it.”

Already there is talk of some aircraft deliveries getting delayed...something that may hurt Air India's expansion plans. But the new CMD is still confident that he can deliver and give customers the old Maharaja experience.