AI-Indian merger to take shape in 4 months: Patel

Published on Mar 02, 2007 02:58 PM IST

The amalgamation process would be carried out in phases over two years.

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"The new entity formed after the merger of state-run carriers Air India and Indian will be in place within four months," Civil Aviation Minister Praful Patel informed the Parliament on Friday.

Announcing the government's decision to merge the two airlines in Parliament, Patel said the amalgamation process would be carried out in phases over two years and its technical formalities put in place in the next 16 weeks.

"It is estimated this decision would result in the net benefit of Rs 600 crore at the end of third year of merger," he said in a statement laid in both the Houses of Parliament.

"The technical and procedural formalities for merging the two airlines would begin immediately and one company with one name, one brand, one logo, one code and single financials is expected to be in place within the coming 16 weeks", he said.

Maintaining that the new airline would be comparable to any other major airline "at least in this region", Patel said it would have a fleet of about 112 aircraft, with both international and domestic footprint.

The carrier would "set fresh benchmarks for efficiency and reliability, thus benefiting the civil aviation sector in the country, specially the travelling public", he said.

Patel said in the past decade, the financial position of the two carriers had been adversely affected due to intense competition and their inability to induct new fleet. "There had been a growing tendency of consolidation in the aviation sector, enabling airlines to achieve synergies and reduce costs," he added.

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