These are exciting times for the Maharajah of the skies. Soon after giving the airline the go-ahead for acquiring over 60 aircraft, the government has proposed merging it with the other state-run airline, Indian. The merger of the two airlines is likely to take place in the fiscal year ending April 2007, according to sources close to civil aviation minister Praful Patel. “It is an absolutely logical proposal to consolidate and optimize the use of the assets of the two public sector airlines,” Patel said. The government is expected to approve the merger to create a major airline with 125-130 aircraft, he said. ‘This should happen within 2006-07,’ Praful said, referring to India’s fiscal year ending April 2007.
The two airlines, which face growing competition from private carriers, are already trying to synergize their operations, he said. Both airlines are due to launch initial public offerings (IPOs) and Praful said the merger decision could be implemented at the same time as the
IPOs.
The government plans to sell 20-25 per cent stakes in each carrier to help finance fleet expansion. Praful had said last year that the IPOs were scheduled for early 2006, adding that stakes of 10-20 per cent would be sold.
However the minister said there is no proposal currently to allow foreign airlines to buy stakes in Indian carriers.
Meanwhile, the aircraft purchase programme has finally left the jinxed halls of power. At a signing ceremony at Air-India’s headquarters, Boeing Commercial Airplanes President and CEO Alan Mulally and Air-India Chairman and Managing Director Vasudevan Thulasidas formally announced an order agreement for 68 airplanes. The order, placed with Boeing in December 2005, is valued at more than $11 billion at list prices and deliveries are scheduled to begin in November 2006.
“The positive economics of the 777-200LR, 777-300ER and 787 Dreamliner will offer Air-India operational cost savings and the flexibility to serve new, ultra-long-range nonstop routes that our passengers demand, such as Delhi-New York and Mumbai-San Francisco,” said Thulasidas. "The combination of the 777 and 787, matched with the reliability and low operating costs of the 737s, will provide a competitive advantage for Air-India and Air-India Express.
“Air-India will ensure that these new aircraft have the latest passenger amenities on board so that, with the induction of these aircraft, the airline can emerge as one of the leading global carriers,” Thulasidas added.
Additionally, Boeing has announced that it has committed to investing in a regional maintenance, repair and overhaul base, and a pilot training facility in India.
“We are committed to our customers’ success,” said Dinesh Keskar, vice-president of Sales, Boeing Commercial Airplanes. “Our airline partners are looking for solutions, and Boeing has the most efficient airplanes and the broadest range of support products and services to help our customers maximise their fleets’ operational efficiency,” he said.
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