Govt sets up GoM to speed up merger of Air India, Indian
In a move that takes Air India and Indian closer to the much-discussed mega merger in the Indian aviation sector, the government has set up a group of ministers (GoM) to look into the grand alliance between the two government-owned carriers.
Defence minister Pranab Mukherjee is likely to head the GoM which will include finance minister P Chidambaram and law minister HR Bhardwaj besides civil aviation minister Praful Patel, official sources said. The other members of the panel are tourism minister Ambika Soni, company affairs minister Prem Chand Gupta, Planning Commission deputy chairperson Montek Singh Ahluwalia, public enterprises minister Santosh Mohan Deb and minister of state for personnel Suresh Pachauri.
The GoM is likely to be notified soon, sources said. The management of both the carriers would make a presentation before the committee, it is understood. Prime Minister Manmohan Singh has responded positively to the merger and Mr Patel is planning to do it by the end of the current financial year. Once the GoM clears the merger plan, it would be placed before the Union Cabinet. The civil aviation minister is confident that Cabinet approval would be obtained by December.
The merger would create a mega carrier that would have the potential to take on global giants like Singapore Airlines and Emirates. The benefits of the merger are being listed out now for the information of the GoM and the Cabinet, sources said.
Consultancy firm Accenture is the advisor for the merger and possible modes of synergy are being explored now. A key aspect that is being monitored by the government is the concern of employees who are keen to see that no job loss results from the merger. Also, issues like seniority and uniform pay scales need to be worked out.
Another issue that needs to be tackled is multiple aircraft types, civil aviation experts said. Air India uses a Boeing fleet but that consists of various types from B747-400 jumbos to B737-800s used by Air India Express for low-cost services.
On the other hand, Indian’s fleet is dominated by Airbus A320s but the airline’s subsidiary, Alliance Air, uses ATR turboprops.
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