GoM set up for A-I, Indian merger

The government has constituted a group of ministers (GoM) headed by Finance Minister P Chidambram to oversee the merger of state-run carriers Indian Airlines and Air India.

Prime Minister Manmohan Singh had constituted a four-member GoM to sort out the issues relating to the merger, Civil Aviation Minister Praful Patel said. The other members of the GoM are Law Minister HR Bharadwaj, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Patel.

Ahead of the proposed merger, Patel warned the staff of the two carriers to either perform or perish.

"I am personally not very happy with the way the two carriers are performing. Government support is only to an extent. Beyond this, the airlines have to retain their standards of performance. The government will not remain a mute spectator to the goings-on in both the carriers," he said after receiving the first newly acquired Airbus A-319 at the Indira Gandhi International Airport here.

The minister said the government was not engaging in a blame game with the airlines, but was "looking at the totality of a lot of things which should have been done and have not been done. We would not like to see things drift. I want to tell each and every employee of Indian and Air India to come up to the expectations of the people."

He went on to assert, "By the end of this fiscal, the two carriers will merge to become a strong airline to take on domestic and international competition."

Patel's tough talk came in the backdrop of rumblings among the staff of both the carriers on several issues including pay, career growth, postings, and productivity-linked incentives.

While the civil aviation ministry has already asked the management of Indian and Air India to consult their staff before a final decision was taken on the merger, Patel made it clear that no employee will loose their job.

Asked whether the government would allow the carriers to make fresh demands for aircraft acquisition in view of the prevailing aviation scenario, he said it was up to them to take a call. "If they require more aircraft, they should come up with a proposal before the government, and we will look into it positively."

Meanwhile, the Accenture-led consortium, appointed as consultants by the government to prepare a roadmap for the merger, has submitted its recommendations that include four options.

One of the options, being favoured in government circles, broadly stipulates that the boards of the two carriers and the top-rung management be amalgamated within this fiscal, to be followed by a staggered integration of employees. The other options include setting up a holding company for the two carriers or merging one with the other.