GoM clears merger of Air-India, Indian; formal clearance by March

21 February 2007

New Delhi: The Group of Ministers (GoM), a committee of the Government of India's cabinet, on Wednesday endorsed the civil aviation ministry's proposal to merge the two State-run carriers - Air-India and Indian, civil aviation minister Praful Patel said.

According to the minister, the issue will now go to the Union cabinet. He also said that the Government intended to complete the decision making process by March 31.

Patel cautioned that the merger would not be an overnight affair, as the transition period envisaged a spread of 18-24 months. He mentioned that the finance ministry had broadly endorsed the issues relating to stamp duty, registration and taxes.

The prime minister, Dr Manmohan Singh, had constituted the GoM to look into the merger of Indian and Air India, last year in October. The nine-member GoM included the ministers for defence, finance, company affairs, civil aviation, public enterprise and personnel apart from the deputy chairman of the planning commission.

The Governments move to merge the two State-owned carriers had come even as the market share of both had shown constant slippage over the last year or so.

Making the announcement, Patel also sought to allay fears of employees about job security and other related issues, saying that the employees could be rest assured that their employment conditions would remain unaffected.