Air-India float to follow merger with Indian

The initial public offer (IPO) of Air-India (A-I) has been put on the hold as the civil aviation ministry is currently focusing on the merger of Indian and A-I.

Union civil aviation minister Praful Patel said while Indian was strong in the domestic market, A-I had a strong international presence, and consolidation would help achieve a critical size.

The minister was in Kolkata for the inauguration of the train service between Netaji Subhash Chandra Bose International Airport and Dum Dum Cantonment.

"At present, we are looking at the merger that would make the merged entity a formidable carrier. Then we may go in for the IPO and it may also be more meaningful at that point of time," Patel said. Also, the current market scenario was not ideal for an IPO, he added.

DSP Merrill Lynch had been appointed to advise the airline on the offer. Patel also spoke aabout the development of non-metro airports.

He said 35 airports have been identified for development and would require an investment of Rs 10,000 crore. The minister said, "These airports will have to be developed to world standards, and the project was likely to be completed by 2008-09."

"The entire project will be executed by the Airport Authority of India. Part of the project will be financed through internal accruals while the remaining money will be raised from the debt market and bonds," Patel added.

The prime objective was to create a navigation-grid in the country with six major metro airports, 35 non-metro airports and upcoming airports in the tier-III cities.

Without referring to the Union ministry's difference in opinion with the West Bengal government over modernisation of Kolkata airport, Patel said, "Creating a world-class airport is a challenge. We want co-operation from stakeholders for achieving it. We want to create an infrastructure for Kolkata that will last at least 30 years." he said foreign airlines like British Airways and Lufthansa have been asked to increase their flights to Kolkata.

However, the minister indicated that, given the low traffic, a greenfield airport in Kolkata might not be necessary at the moment.