AI, IA to merge in April?

16 January 2007

According to media reports, Air India and Indian Airlines will join forces by the start of April 2007.

The report cites unnamed ministers, who have said that the merger would not result in any job losses.

According to unidentified official sources, the deal would make the new entity more competitive, yielding annual savings of Rs5 billion ($113 million). The government expects the combined entity to become one of the world's top 20 airlines.

Civil aviation minister Praful Patel is quoted as saying, "Everybody feels the process of merger is appropriate."

Air India was started by aviator-industrialist J R D Tata in 1932 as Tata Air Service, a parcel carrier with two Puss Moths, three pilots and two mechanics.

In 1946, the airline went public and became Air India, before being nationalised in 1953. The flagship carrier today serves more than 40 destinations worldwide, while Indian Airlines is a government-owned domestic air service.