Air-India, Indian Airlines may be merged

Indian minister talks consolidation at Singapore air show

BY A CORRESPONDENT
February 21, 2006

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Air India and Indian, (formerly Indian Airlines) may be merged after their initial public offerings are completed, in an attempt to tide over the the stiff competition in Indian skies. A decision on the merger is expected to be made later this year.

According to aviation minister Praful Patel, "We are looking into synergising the operations of Air India and Indian to make them stronger carriers. However, we are yet to decide on the structure of the merger."

He was speaking to reporters on the sidelines of the IATA Aviation Summit, being in Singapore, in conjunction with Asian Aerospace. The world's third-largest airshow, commenced at Singapore's Changi exhbition center on Tuesday.

A merger could help raise the competitiveness of theese airlines against privately-owned airlines, especially with the country witnessing an onslaught of no-frills carriers, he added.

On Air-India's IPO, the minister said it would be delayed by at least two months as the final details are still being planned. The carrier was looking at offloading 20-25 per cent of its share to the public.

Financial details are still being worked out between the airlines and their advisers, and the carrier would come out with an IPO in May, a delay by two months.

Air India Chairman V Thulasidas had previously said the airline would launch its IPO by March 2006.

India's aviation sector is witnessing 25% annual growth in both cargo and passenger traffic, and this rate is expected to be maintained over the next five years.