Synergy plans for A-I, IA to prevent overlap

The government plans to synergise the international operations of the two state-owned airlines, Indian Airlines and Air India.

This is being done to ensure that the two carriers do not compete for the same routes and do not have to invest heavily in setting up infrastructure at the same locations.

"If both the carriers operate on the same route, it will lead to duplication of networks. This will require huge investments. If the international operations of the two airlines are synergised, these costs can be avoided," said a senior government official

Sources said that the Civil Aviation ministry is expected to make a proposal to this effect to the Union Cabinet shortly

A recently commissioned study by the government has pointed out that the improved collaboration between Air India and Indian Airlines would generate potential benefits to the tune of Rs 340 crore for the government as a shareholder.

Of this, about Rs 238 crore could be generated through efficient integration of networks of the two carriers.

The government is of the view that in the case of Indian Airlines, the present fleet configuration is based on its requirements for domestic operations and short-haul operations to the neighboring regions and it would have to undergo a major change in case it wants to operate on other routes.

This move by the government comes at a time when Indian Airlines has asked for approval to operate on more international routes, including flights to the US, the UK, Hong Kong, Saudi Arabia, Australia and New Zealand.

The international operations of Indian Airlines at the moment are restricted to the Middle-East, South East Asia and Saarc countries.

The government also wants the two airlines to streamline their operations by creating a hub-and-spoke arrangement within the country to make the best possible utilisation of the traffic rights in the international sector. The civil aviation ministry will soon workout a detailed plan for this.

The government had appointed AT Kearney to undertake a study on the possibilities of co-operation between the two carriers. The consultancy firm had recommended a better synergy of operations between the two carriers.