AI-Indian merger cleared, first flight soon

New Delhi, Aug 22: All legal formalities relating to the merger of government-owned Air India (AI) and Indian are now complete.

The ministry of corporate affairs has approved the merger and a formal notification is awaited anytime soon, said Vasudevan Thulasidas who is Chairman and Managing Director of the combined entity called National Aviation Company of India Ltd (NACIL).

''We're ready to operate first flight of the combined airline,'' he told reporters after civil aviation minister Praful Patel held a review meeting of the merger process.

The corporate affairs ministry has approved the proposal despite objections raised by employees and staff unions.

The two carriers had approached the corporate affairs ministry under section 396 of the Companies Act 1956 for their dissolution and registration of NACIL. As per this section, the ministry has the power to allow merger of public sector enterprises in public interest.

The new combined carrier will be called Air India for both international and domestic flights. It will have 112 aircraft to begin with, 34,000 employees and an equity base of Rs 150 crore.

After leased planes are returned and the aging ones retired, the order for 111 new planes will lead to a fleet size of 130 to 135 planes by 2011. But this number could be much higher as a panel set up by Mr Thulasidas has recommended the purchase of 60 more planes. ''We'll be working in a more business-like environment, and be accountable to the investing public,'' he said.

The merger also promises seamless travel for passengers from India, as they can directly check in from any point in India to their foreign destination on the new AI.

The amalgamation is brainchild of Mr Patel to create a global airline with the precision and reliability of Lufthansa and passenger service standards of Singapore Airlines.

The initiative will make NACIL one of the top 10 airlines of Asia in terms of size. More importantly, the airline will also join a global alliance.

The budget arm of NACIL -- AI Express -- is expected to begin domestic operations in October. Its fares will match those offered by existing low cost carriers.

Besides, it will have a separate cargo division, an MRO (maintenance, repair and overhaul) facility and a hub in Europe for trans-Atlantic traffic.

UNI