India merger nears completion

Several previous governments have considered merging the two carriers only to decide against it in the face of opposition from unions and “left-leaning” politicians. But the Indian air transport market has changed dramatically over the past three years following the launch of new carriers. Civil aviation minister Praful Patel has said a merger is necessary for the state-owned carriers to compete in the long term with fast-growing privately owned airlines.

Consulting firm Accenture India was hired to assist in preparing a “roadmap” for a merger and in November its recommendations were considered by a so-called Group of Ministers, which will decide how to proceed and make final recommendations to Cabinet.

At their initial meeting the ministers decided a group of ministry secretaries would be tasked with drawing up recommendations covering specific details related to the planned merger, such as staff integration, and legal and taxation issues. How the enlarged airline will be branded is also under study and is a particularly sensitive subject.

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