Our Bureau

New Delhi, April 11

The Government is yet to take a decision on whether Air India and Indian Airlines should have a simultaneous initial public offering (IPO). "The merchant bankers working on the IPO for the two airlines have sent various interim reports to the Government. They have suggested many things, including looking at postponing the initial offering till such time as both airlines have new aircraft. This, the merchant bankers feel, will help get a better valuation. The Government, however, is yet to take a decision on the various reports received," a senior Government official said.

When contacted, the Minister for Civil Aviation, Mr Praful Patel, refused to comment on which route the Government felt the airlines should adopt. "The merger is on the cards and will happen this year itself," he said.

The two airline boards have already cleared the proposal for tapping the market with an IPO. The two airlines are likely to divest 20-25 per cent of the stake.

Meanwhile, the Government is examining the possibility of the two airlines having a single Maintenance, Repair and Overhaul (MRO) facility.

"A team from the European aircraft manufacturer will be coming in May to discuss the setting up of the MRO. A team from Boeing has already been here and visited Nagpur," said the Secretary Civil Aviation, Mr Ajay Prasad.

Airbus and Boeing have agreed to establish an MRO centre in India as part of the counter trade agreement agreed to at the time of sale of more than 100 aircraft to AI and IA.

While IA is to purchase 43 Airbus aircraft, AI is to purchase 68 Boeing aircraft.

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(This article was published in the Business Line print edition dated April 12, 2006)
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