Nicholas Ionides / Singapore
The seven-member committee comprises Air India chairman and managing director V Thulasidas; Indian Airlines chairman and managing director Vishwapati Trivedi; two senior Ministry of Civil Aviation officials; the finance directors of Air India and Indian Airlines; and Air India independent director and ICICI Bank chairman N Vaghul.
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| Air India managing director V Thulasidas favours a merger with Indian Airlines |
Thulasidas (pictured above) says the top executives of both Air India and Indian Airlines are in favour of a merger, which was recently proposed by the government. He says it will help create a true “network” airline operation and help the enlarged carrier compete more effectively against rival privately owned Indian airlines and foreign operators.
Calls for a merger of Air India and Indian Airlines arise every few years, but they have been consistently shot down due to opposition from employees and politicians. This time many industry observers believe it may go ahead as the latest proposals are being aggressively supported by civil aviation minister Praful Patel and prime minister Manmohan Singh. Patel has said he expects the Indian Cabinet to approve a merger sometime during the current fiscal year that ends in March 2007.
How a merger will proceed, given that the carriers have different operating bases, different fleets and large numbers of unionised employees, remains to be determined. Thulasidas says that ultimately it will be up to the government, as shareholder, to decide. But he says the Ministry of Civil Aviation recently called on Air India to appoint a consultant to work on behalf of both airlines “to prepare a roadmap for the merger”.
“We want to combine the two large airlines of India into a truly large Asian airline group,” says Thulasidas. “We have been held back so far despite the fact that in the past three years we have been able to expand the size of the fleet and the size of the operations. We could have something of the order of 125-150 aircraft with the two airlines together. That will make us one of the largest and strongest airlines in Asia.”
Mumbai-based Air India operates international services using widebodies, while Delhi-based Indian Airlines operates domestic services as well as short- and medium-haul international flights, mainly using narrowbodies. Air India also has an international low-cost subsidiary, Air India Express. Indian Airlines has a domestic subsidiary, Alliance Air.
Both carriers have faced increased competition over the past couple of years as new domestic carriers have been approved and foreign carriers given more rights to serve the country. ■
Source: Airline Business
