Air India, Indian complete merger

The long-planned merger of Air India and Indian Airlines has finally become reality following the completion of remaining legal formalities.

India’s Civil Aviation Ministry says in a statement that the Ministry of Corporate Affairs has approved the merger of the two airlines under a holding company called National Aviation Company of India (NACIL).

The actual integration of the two airlines’ operations will probably take around two years to complete and the enlarged carrier will operate under the Air India name.

“With the filing of this approval…with the Registrar of Companies, the legal process for merger of Air India and Indian Airlines in National Aviation Company of India will stand completed,” says the Civil Aviation Ministry.

“The new airline will have a combined fleet size of over 112 aircraft, comparable to the best airlines in the Asian region, and will rank among the top 30 airlines in the world. As part of its fleet acquisition programme of 111 aircraft, the new airline will be inducting 21 new aircraft (seven Boeing 777s, 10 A320-family aircraft and four Boeing 737-800s) this year itself.”

Merging the two airlines is intended to create a true “network carrier” operation and enable the enlarged airline to compete with expanding privately owned operators. Air India primarily operates international services while Indian Airlines operates domestic services as well as short-haul international services.

Their respective low-cost carriers, Air India Express and Alliance Air, are due to integrate their operations next month, when the Alliance name is expected to be eliminated.

Air India and Indian have both been modernising and enlarging their fleets in recent years and Air India head V Thulasidas, who is now the chairman and managing director of the enlarged carrier, said recently that proposals are being put together for the purchase of many more aircraft.

The new carrier is also seeking to join a multilateral alliance and Star Alliance is known to be its first choice.

“The merger of Air India and Indian will provide an integrated international and domestic footprint, which will significantly enhance customer proposition and allow easy entry into a global airline alliance. The merged airline has given them the opportunity to unlock significant synergies on account of optimal utilisation of resources through improvement in load factors and yields on commonly serviced routes as well as deployment of ‘freed up’ aircraft capacity on alternate routes,” says the Civil Aviation Ministry.

“Leveraging the combined network and route rationalisation will result in improved product offerings to consumers. The merger will provide an opportunity to fully leverage strong assets, capabilities, infrastructure and skilled and experienced manpower available with both the companies to the optimum potential.

“It will also provide a large and growth oriented company for the people in larger public interest, provide maximum flexibility to achieve financial and capital restructuring through revaluation of assets, and provide an increased thrust and focus on airline support businesses.”

Source: FlightGlobal.com