Parliamentary panel wants Air India split back into two

New Delhi: A parliamentary committee said that the government had blundered by merging state-owned carriers Air India and Indian Airlines and that the combined entity was “fast slipping into an abyss”, calling for a reversal of the decision.
“The so-called merger is a kind of marriage between two incompatible individuals having wide variances with hardly any meeting ground,” V. Kishore Chandra S. Deo, chairman of the Committee on Public Sector Undertakings (Copu), said in a 118-page report tabled in Parliament on Friday, three years after the merger took place.
“Multiplication of losses suggests something radically wrong either with the projections of the benefits of the merger or with the implementation of the merger,” he said.
Run by National Aviation Co. of India Ltd (Nacil), Air India, as the merged entity is known, is expected to lose Rs5,400 crore in the year to 31 March, aviation minister Praful Patel told Parliament this week, adding that “the trend of losses is likely to continue for few more years”.
The panel recommended turning Nacil into a holding company with two wings: Nacil-Indian Airlines, with its headquarters in Delhi, and Nacil-Air India, with its headquarters in Mumbai, each headed by a managing director and reporting to a common chairman. The panel criticized the civil aviation ministry over the move. “Having imposed the merger of the two carriers, the (civil aviation) ministry has shown little initiative in monitoring the progress,” the report said.
13/03/10 Tarun Shukla and Liz Mathew/Live Mint

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Categories: Air India - International Mar 2010, Air India Domestic Mar 2010, NACIL Mar 2010