The Hindu Business Line : Group of Ministers approves merger of Air India, Indian

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Group of Ministers approves merger of Air India, Indian

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A new company to be created, into which both the airlines would merge

Merger process
Plan to approach the Cabinet before March 31 and the process will be completed within 1-2 years.
The employees would be on the rolls of the new parent company.

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New Delhi Feb. 21 The Group of Ministers on Wednesday gave its approval for the merger of Air India and Indian and has suggested that a new company be created into which both the airline should merge.

Briefing newspersons after the meeting, the Union Minister for Civil Aviation, Mr Praful Patel, said that the merger process would get underway after the Cabinet approves it.

"We plan to approach the Cabinet before March 31 and 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," Mr Patel said.

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

The Finance Ministry has already given its approval to waive the stamp duty charges and the tax liability to the new entity under Section 72 (A) of the Income-Tax Act, he said.

While a one-time merger cost of around Rs 200 crore would have to be borne, the merged entity would have an annual saving in excess of Rs 600 crore, the Minister pointed out.

"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.

The merged entity would also bring huge value to the various global airline alliances that are currently wooing both Air India and Indian.

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