Airline merger gain put at Rs 800cr

Mumbai: The merger of Indian and Air-India will yield a synergy benefit of Rs 800 crore after forking out Rs 200 crore as the cost of integration for the two state-owned airlines.
That is a back-of-the-envelope calculation at Air-India; civil aviation minister Praful Patel has put the synergy benefit at a more modest Rs 600 crore.
The National Aviation Company of India (NACIL) — which will fly under a single code from mid-July — will have a pretty large pyramid of top managers at 151 from general managers upward. It will have a chairman-cum-managing director (CMD) at the helm, nine functional directors or CEOs and 47 executive directors.
The two airlines have already formed 12 working groups to deal with integration issues. Both the airlines reckon that the sticking points will be easily resolved.
No retrenchments are being planned and pay structure at the two organisations are being rationalised to place employees with similar work experience on a par.
15/05/07 Anirudh Laskar/The Telegraph

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Categories: Air India May 2007, Indian May 2007