GoM to study AI-Indian merger today

Aiming a "painless" merger of Air India and Indian, a Group of Ministers (GoM) will hold its first meeting tomorrow to study the consultant's recommendations on the issue and propose a roadmap to complete the process by March next year.

The GoM, headed by External Affairs Minister Pranab Mukherjee, would work in a time-bound manner to finalise a roadmap for the merger and take the proposal to the Union Cabinet for its approval.

In keeping with the concerns of employees of both the state-owned carriers, the government plans to go ahead with the merger process to ensure that salaries, seniority and other matters remain protected and the integration process is "as painless as possible", official sources said.

The consultant, M/S Accenture India Pvt Ltd, has already submitted its recommendations and has confirmed that due care is being taken to ensure protection of the current salaries, compensation and perks of the staffers of both companies.

Besides Mukherjee and Civil Aviation Minister Praful Patel, the GoM has Finance Minister P Chidambaram, Law Minister H R Bharadwaj, Tourism Minister Ambika Soni, Suresh Pachauri (Personnel), Prem Chand Gupta (Company Affairs), Santosh Mohan Deb (Public Enterprises) and Deputy Chairman of Planning Commission Montek Singh Ahluwalia as its members. The proposed merger of Air India and Indian would churn out a mega carrier with over 130 aircraft that could take on global giants like Singapore Airlines, Emirates and British Airways. The merger of Jet Airways and Air Sahara, which failed, could have had a combined fleet of about 75-80 planes.

The managements of Indian and Air-India have already written letters to their staff seeking consent on the merger process and also assuring them that their interests would be kept in mind during the process.

Accenture has submitted four options as part of its recommendations. One of the options, which is being favoured in government circles, broadly stipulates that boards of the two carriers and the top-rung management be first amalgamated within this fiscal, followed by a staggered integration of the employees.

Ticklish issues of whether Indian would merge into Air India or vice-versa and the brand name of the new entity have been left open for the GoM to decide.

Asked whether the government would allow the two carriers to make fresh aircraft acquisition demands in view of the prevailing aviation scenario, the sources said it was entirely up to them to take a call and the government would consider it positively.

While AI has ordered 68 planes from Boeing, Indian is acquiring 43 from Airbus Industries.

However, the process is already witnessing roadblocks with the unions, like the Air Corporations Employees' Union, opposing the move saying its ten-point charter of demands should first be accepted. The demands include problems relating to pay structure, seniority and career progression.