Indian state-run carriers get closer to a merger

India’s two state-run carriers Air India and Indian got closer to a merger as the empowered group of ministers (eGOM) gave their go ahead, paving the way for emergence of a single entity as India’s national flag carrier. 

“The eGOM has endorsed the proposal for merger of Air India and Indian. The issue will now go to the Union Cabinet for approval. We intend to complete the process by March 31,” said India’s Civil Aviation Minister Praful Patel.

He added, “The entire merger process will be completed within the next one-to-two years. Post merger, the public sector character of the company will be maintained. While there would be various business units, the employees would be on the rolls of the new parent company. No employee would be worse off than at present. There would be a mechanism to protect all categories of employees including the casual workers,” said India’s Civil Aviation Minister Praful Patel.

The Minister said that the merger process would get underway after the Cabinet approves it.

No decision has, however, yet been taken on the name of the new entity or where it would be headquartered, the Minister added.

The Minister told local media that while a one-time merger cost of around US$44.4 million would have to be borne, the merged entity would have an annual saving in excess of US$133.3 million.

“The merger will bring immense benefits to the passengers who would not only enjoy seamless travel but also benefit from the use of lounges in various airports,” the Minister said.