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A-I, IA merger likely in 2006

This is to turn the combined entity into a mega carrier with about 130 aircraft to take on the major global carriers.

india Updated: Mar 16, 2006 13:02 IST
Press Trust of India
Press Trust of India

A decision to merge Air India and Indian Airlines is likely to be taken in the current fiscal.

This is to turn the combined entity into a mega carrier with about 130 aircraft to take on the major global carriers like Singapore Airlines, Emirates and British Airways.

Keeping in mind the global aviation scenario, where such mega mergers have taken place in the recent past, from KLM-Air France and Lufthansa-Swissair to Jet Airways and Air Sahara in India, "it is an absolutely logical proposal to consolidate and optimise the use of the assets of the two public sector airlines," said Civil Aviation Minister Praful Patel.

Maintaining that such a proposal would have to be cleared by the Union cabinet, he said, "this should happen within 2006-07.

He further added that the two airlines were already attempting to synergise their operations.

Patel said the emergence of Delhi and Mumbai, as hubs of their future operations with most modern world-class airports would help the combined entity to spread its operations having a fleet of 125-130 aircraft.

Asked whether the decision would be taken after the two carriers issue their Initial Public Offers (IPOs), he said both these decisions could be implemented at the same time.

The government expects to offload 20-25 per cent equity in these two airlines through the proposed IPOs.

Responding to a series of questions on aviation-related issues, he said major initiatives would be taken to encourage regional air connectivity, apart from improving airport infrastructure at 35 selected non-metros.

The Civil Aviation Ministry was considering a five-year holiday on payment of landing, navigation and parking charges to airlines, which would provide regional feed from a single metro in a state with 60-80 seater planes like turbo-props, Patel said.

First Published: Mar 16, 2006 12:45 IST