State-run Air India Ltd. said the federal government has appointed Rohit Nandan, a joint secretary in the ministry of civil aviation, as the ailing carrier's new chairman and managing director.

Nandan, who assumed charge on Friday, will replace incumbent Arvind Jadhav and will oversee the airline's turnaround and debt restructuring plan.

Loss making Air India is in talks with banks to restructure US$4 billion of working capital debt and is in the midst of implementing a turnaround plan with a hub-and-spoke route model focus, cut costs by redeploying staff and unload non-core real estate.

A financial restructuring plan for Air India will take about three months to complete, the civil aviation minister said on Friday. .

The airline is estimated to report a loss before tax of 69.94 billion rupees (US$1.5 billion) for the year ended March. (US$1= 45.3 Indian rupees)