The Hindu Business Line : Air India invites EoI for consultant for merger with IA

AIR India has invited applications from reputed international investment banks, SEBI registered merchant banks, financial institutions and other management consultancy firms to be appointed as a consultant to advise on the merger with Indian Airlines.

The airline has specified that the consultant should have a minimum share capital of Rs 50 crore and a turnover of Rs 100 crore apart from having experience in handling the valuation of public sector enterprises in India. While taking a final decision the airline will look at a variety of parameters including the consultant's expertise in areas involving integration of Maintenance, Repair, Overhaul (MRO) facilities, engineering set-up, ground handling and airport infrastructure, integration of employees cadres at various levels, capital market experience in government or quasi-government and private sector including IPO issue.

The airline board had cleared the proposal for inviting Expression of Interest for appointment of a consultant at its last board meeting held recently in Mumbai.

Senior airline officials expressed confidence the process of appointing a consultant would be completed shortly.

The Minister for Civil Aviation, Mr Praful Patel has already indicated that the merger of the two state-owned airlines would be completed during the current financial year itself.

The eventual merger would create an entity that would have a fleet strength of more than 100 aircraft and be better placed to take on competition from international airlines. However, there are several issues that would have to be considered before the merger including rationalisation of the routes between the two airlines. At present the airline operates flights to several global destinations in West Asia and the Far East including Bangkok, Malaysia and Singapore.

Besides, the decision on which airline would be taken over by whom and the fate of the subsidiaries — Alliance Air and Air India Express and the issue of how best to utilise their existing manpower would also need to be looked at.

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