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No political meddling after Indian-Air India merger: Patel

business Updated: Mar 24, 2007 14:40 IST
No political meddling after Indian-Air India merger: Patel

There will be no political interference following the merger of Air India and Indian Airlines, and a new chief executive for the yet-to-be named entity will be announced by April 5, Civil Aviation Minister Praful Patel has said.

And even though the merged entity may go for an initial public offer (IPO) later, it would continue to remain a public sector enterprise, the minister told a private news channel on Sunday.

"Misuse and abuse of powers is not going to happen. What is in the interests of the airline will be paramount," Patel said.

Asked if the employees would be protected if they refused to give special favours to politicians, the minister replied: "Of course, they will be protected."

Patel said an initial public offer of the two airlines could not take place last year because of market conditions. "Even the advisors told us that the valuation on a stand-alone basis for Indian Airlines and Air India was not very good."

"After merging, we will certainly look at every aspect of how we raise money, how to bring in more accountability," he said and added, "But an IPO does not mean we will lose public sector character. That we will not."

The minister also said that despite being a public sector unit, salaries paid to professional staff will be competitive and stock options for employees would also be considered. "It's a guarantee."

On induction of professional managers, the minister said there was no assurance that bureaucrats would not find a place at the top. "I do not think businessmen are the only solution. We will have the right man at the right place," he said.

"I have been in government long enough to understand that there are excellent bureaucrats who can handle absolutely difficult situations," the minister said, and credited them for the transformation in the ministry.

"We have good people in the system. Don't think Air India and Indian Airlines are devoid of people, that they have been functioning for all these 50 years without the right people or people without experience!" he added.

The minister also set aside apprehensions that the $900 million interest burden annually will prevent the merged airlines from taking off, adding the same will have existed despite the merger because of the ambitious fleet expansion plans.

"That is not true at all. The merger brings in more synergies, brings in more cost savings, makes it more serviceable for the debt," he said.

According to the minister, the issue of a mismatch in the seniority of managers in the two airlines — where Indian Airlines has younger members at parallel positions — will also not pose any major hurdle.

"There is a well-laid-out procedure to solve these kinds of problems. And mind you, before we went into this kind of exercise, a lot of work and detailing and a lot of application of mind has gone into this process," he said.

On issues concerning the identity of the merged airline, the minister said the name, logo and other aspects will be decided after securing a report from the appointed consultants and that he will only play the role of a neutral umpire.

"I don't want to voice an opinion," he said. "I just want to say India should have a top-class, world-class airline and it should be an airline which should be able to take on the best."