The Hindu Business Line : `Consultant for AI-IA merger soon'

A decision on appointing a consultant to draw up a roadmap for the merger of Air India and Indian airlines will be taken shortly, the Minister for Civil Aviation, Mr Praful Patel, has said.

"The merger is very much on and will happen this financial year. The proposal for appointment of a consultant is likely to be cleared by the airline board at its meeting soon. The proposal can be taken by the board of one of the airlines also," Mr Patel told the media in an informal interaction.

The consultant will take a view on a variety of issues including whether the two airlines should go in for a common initial public offering, the Minister said.

Minimum equity for scheduled airline

Meanwhile, the Government is also examining a proposal to hike the minimum equity required for setting up a scheduled airline. "No substantial hike is being looked at. The minimum equity required to set up a scheduled airline could be raised to Rs 50 crore from the existing Rs 30 crore. This should not be a big issue as most of the airlines already have an equity that is more than the prescribed levels. There will, however, be no change in the existing clause of requiring five aircraft to be called a scheduled airline," Mr Patel said.

The Minister also indicated that the Government was considering lowering the age of aircraft that can be imported. "We are a young country, why should we fly old aircraft? We could consider reducing the age of aircraft being imported from the existing 15 years to 10 years," the Minister said.

Sops for regional connectivity

On the proposed civil aviation policy, Mr Patel said it would look at promoting regional connectivity by providing a series of sops. "We could look at providing airlines that operate small aircraft that seat up to 80 passengers from one metro to regional routes and a host of concessions including waiving all airport charges for a specified number of years," the Minister said.

The Government, however, has no intention of doing away with the route dispersal guidelines that ensure that every corner of the country and not just the big cities have air connectivity, Mr Patel said.

"The policy will look at setting up an Essential Air Services Fund," the Minister said. The proceeds from the fund are likely to ensure that air services are available in every part of the country.

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