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.
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.
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