The Hindu Business Line : AI board approves appointment of consultant for merger with IA

"The Expression of Interest for appointing the consultant will be floated shortly. We expect to shortlist the consultant within the next four-six weeks," a senior AI official said. The consultant would draw up a road map for the merger, and also look at whether both the airlines should tap the capital market as a merged entity or as separate entities.

The Minister for Civil Aviation, Mr Praful Patel, has already indicated that the merger would be completed during this financial year. The Ministry has also made a presentation to the Prime Minister, Dr Manmohan Singh, on the benefits of the merger.

The proposed merger of the two airlines would provide a host of benefits to both the airlines and passengers. The merged entity would eventually have a fleet of more than 100 brand-new aircraft including some that would be in a position to undertake non-stop, long-haul flights like flying between Mumbai and San Francisco. The merged entity should also help the state-owned airlines get a larger share of the country's international air traffic, which stood at less than 30 per cent last year. Sources indicated that there would have been some further slippage in the market share of all Indian carriers operating abroad, as major international airlines such as British Airways and Lufthansa have been adding flights into India at a very rapid pace.

However, there are several issues including rationalisation of routes and manpower that would have to be sorted out before the merger can be completed. While AI has more than 15,400 employees, IA has more than 18,000 on its rolls.

Currently, the two airlines operate flights to several global destinations in West Asia and the Far East including Bangkok, Malaysia and Singapore.

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