Move afoot to demerge Air India

New Delhi: The ministry of finance may have initiated a move to demerge national carrier Air India into two separate entities – domestic and international, back in the same form as it existed prior to its merger. Reports suggest that the move to de-merge comes with the national carrier displaying a lack of credible response to restructure itself effectively.

The finance ministry is now, reportedly, wary of pushing in vast sums of money to bail out an enterprise that refuses to move in step with the times.

According to reports, a demerger proposal has been worked out by the expenditure secretary and placed before the empowered group of ministers (E-GoM) on Air India. Other ministries will now get back with their comments by 3 February when the group meets again.

Reports also suggest that the PMO may be in accord with the move but has stressed caution in that the move to demerge should not turn out to be as ill-thought as the earlier one to merge.

The earlier move to merge domestic carrier, Indian Airlines, and international carrier, Air India, was proposed and carried through by civil aviation minister Praful Patel.

Reports, suggesting such a drastic rethink by the finance ministry, emerge in the back drop of a report by a parliamentary standing committee which has sharply criticised the merger as a bad decision that has not shown the required results.