Indian-Air India integration process to start immediately: Praful Patel
03 Mar 2007
New Delhi: Civil aviation minister Praful Patel said Friday that the technical and procedural formalities for the merger of Air India and Indian would begin immediately.
In a statement made to both houses of parliament, Patel said "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. This new airline, with about 112 aircraft with both international and domestic footprint, will set fresh benchmarks for efficiency and reliability, thus benefiting the civil aviation sector in the country, specially the traveling public."
Patel also said that the Government was committed to ensuring that all legitimate employee interests, including their current compensation and status, were protected.
"There will be no retrenchment and all employees will continue in the merged company. Besides, to keep the exercise as smooth as possible, the integration of manpower will be completed in a phased manner, on the basis of transparent and objective criteria. A well-defined grievance redress machinery will also be put in place."
A new firm, created by merging the two carriers, would be registered under sections 391-394 of the Companies Act 1956 in the next fortnight. The Government proposes to register the new airline as a hundred per cent government-owned public company, keeping in mind a Cabinet decision to maintain the public sector character of the merged entity.
According to civil aviation ministry officials, the actual amalgamation and integration process will be carried out in phases over two years, particularly with respect to the integration of a combined workforce of over 30,000.
"It is estimated that this decision would result in the net benefit of Rs600 crore at the end of third year of merger," Patel said.
According to industry observers, the merged entity will be comparable with carriers such as Emirates, which has a fleet strength of 93 aircraft, Singapore Airlines with 118 and Malaysia Airlines 110. The new company is also likely to create separate strategic business units to look after different streams such as passenger airline, cargo, low-cost carrier, maintenance-repair-overhaul, engineering and catering.
