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"Air India, Indian Airlines May Merge" say Patel...

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  • "Air India, Indian Airlines May Merge" say Patel...

    State owned carriers Air India and Indian Airlines may be merged after their initial public offerings are completed, India's Minister for Civil Aviation Praful Patel said Monday.

    A merger could help raise the competitiveness of the airlines against more efficient privately owned carriers, Patel told reporters on the sidelines of an aviation conference in Singapore.

    A final decision on the merger will be made later this year, the minister said.

    Indian Airlines is primarily a domestic carrier with a small number of international destinations, while Air India is an international airline.

    Patel said Air India will delay its planned IPO by at least two months as the final details of the offer are still being negotiated. The government expects 20 percent to 25 percent public ownership of the companies.

    Financial details are still being worked out between the airlines and their advisers.

    The proposed IPOs will help raise funds for major fleet expansion plans by both airlines, which are coming under intensifying competition from new low-cost carriers such as Air Deccan, Spice Jet and Kingfisher Airlines.

    The government recently approved Air India's plan to buy 68 Boeing aircraft at a cost of about $7.88 billion, while Indian Airlines is in the final stages of discussions to purchase 43 new Airbus aircraft worth $2.25 billion.

    India's aviation sector is witnessing 25 percent annual growth in both cargo and passenger traffic, boosted by an expanding economy and rising incomes among the country's estimated 300 million-strong middle class.

    Well this will make alot of sense for the Indian Gov't, but no sense for anyone else... This will be horrible for both airlines, and seeing that Air India placed that very significant Boeing order, and then Indian Airlines just placed a massive Airbus order, a major problem will be operational nightmare. Not to mention all of the other problems....
    Whatever is necessary, is never unwise.

  • #2
    Re:

    This has been discussed before, but was shelved twice. This time, it may be considered more seriously, since 9W will become a formidable force in the years to come, w/ its product being offered increasingly around in global markets as it ges all the planes it ordered. Not to mention the advent of the LCC's in India, which have been seeing good loads for the most part so far. Actually, IC and AI codeshare w/in India and abroad and IC operates connecting flights for AI to/from the key hubs.

    Foxtrot

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    • #3
      Stupid Reporters! I saw the clip of the interview on TV and it was very clear: PAtel said NOTHING about the merger!

      All that he said was there would be increased "synergy of operations" between the 2 carriers. Infact at one stage he virtually ruled out a merger!!

      And I think a merger would be stupid decision. As things stand, IC is a much better managed airline that the shithole that is AI. If I coul dhave my way, then AI would be shut down, it assets sold off and fied assets transferred to IC, and routes shared between existing players includng IC.

      I think there is a social justification for the Govt to remain a player in the airline business as IC remains a balancing force in the market which would otherwise be overrun by a single player. There is no justification however to retain AI. THe govt should simply lock out this nasty lossmaking airline and transfer its fixed assets to IC.
      Luv

      C O U G A R
      http://www.cougar-rides.com
      Live to Ride - Ride to Live

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