Wednesday, January 31, 2007

Air India, Indian merger to be cleared by Union Cabinet by Feb-end

The merger of India’s international airline Air India and domestic carrier Indian may get clearance by the Union Cabinet by February-end. The Committee of Secretaries has submitted its recommendations regarding the merger to the Group of Ministers (GoM) headed by External Affairs Minister Pranab Mukherjee. The GoM will meet soon for a final consideration of the recommendations before sending it for the Union Cabinet’s approval. Once the Cabinet approval is received, the two carriers will undertake the legal steps necessary for the merger which should be completed within 3-4 months. However, complete operational and manpower integration will take as much as 12-18 months. Total integration of the two carriers would be completed by end-2008.

The merged entity will become one of Asia's largest airlines with a fleet strength of more than 100 aircrafts. It will have one chairman and one board of directors. It will also add more aircrafts and introduce new routes. The advantages accruing from the merger would comprise additional capacity, additional routes and staff rationalization as excess staff could be deployed on new routes. Following the global trend, the merged entity will cater to both international and domestic markets.

Read The Economic Times article.

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