Air India, Indian merger may add Rs 1,200 cr to kitty

RELATED NEWS Air India takes off into 75th Year Indian, AI told to seek staff feedback on merger What's in store for Mumbai Airport? AI Express to Delhi/Amritsar/Dubai & Mangalore/Dubai sector Nifty BSE | NSE 31/05/12 Are Mutual Funds betting on Nifty?

GoM meet

A clear picture on the way forward is likely to emerge after November 13 when the first meeting of the Group of Ministers set up for the merger is scheduled. 'The merger would result in a single code on the global reservation systems as against two codes for separate airlines at present. This alone should result in an increase in bookings. Besides, a passenger would also benefit by lower fares especially for those travelling from secondary cities,' sources added.

Benefits outlined

Meanwhile, the Chairman and Managing Director of Air India and Indian have written to the employees outlining the advantages and benefits from the proposed merger.

The communication points out that the merger will help create an integrated domestic and international footprint that would significantly enhance customer proposition and enable the airline to participate in global alliances.

'As the two networks and assets are integrated over the next two-three years, it is expected that significant revenue and cost synergies will accrue to the merged entity which would enhance profitability. This would help position and equip the merged entity to better face the current and future changes arising out of intense competition and declining industry profitability. This in turn would translate into improved growth and better career opportunities for our personnel,' the communication adds.

The two top officials have also assured the employees that there would be no retrenchment of staff as a result of the merger. 'The process would be tailored to ensure that no employee is worse off as a result of the merger. Due care will be taken to protect remuneration, perquisites and status of employees,' the airlines have said.

Taken from Business Line

thehindubusinessline.in