Government considering AI-IA merger proposal, says Praful Patel

08 August 2006

Mumbai: The government is actively considering a proposal to merge Air-India and Indian Airlines (now renamed Indian) and a private consultant is evaluating the merger proposal, civil aviation minister Praful Patel informed the Lok Sabha in a written reply.

The committee set up by the Air-India board has appointed Accenture India Private Limited as consultant to evaluate merger plans, he said.

Patil said Indian Airlines continues to retain its name even though the brand name used for publicity and advertising has been changed to Indian. Indian Airlines had spent about Rs3.25 crore on re-branding as a part of budgeted publicity campaign, the minister added.

India's aviation sector is booming with private airlines like Jet Airways, Sahara Airlines, Deccan Airways, Kingfisher Airlines dotting the country's skies. This has affected yields - defined as revenues per passenger ticket - and carriers are ready to cut tariffs further.

And, with New Delhi-based Indigo Airlines starting services and the launch of Jagson Airlines, Magic Air and East-West Airlines expected before the year-end, the situation could only get worse for the national carriers.