A F Ferguson To Study Ai, Ia Merger
In a move towards synergising the operations of Indian Airlines and Air India, the ministry of civil aviation has appointed international consultants A F Ferguson to prepare a blueprint for the formation of an apex body which would deliberate on crucial policy matters relevant to both organisations.
P C Sen, chairman and managing director of Indian Airlines, said here yesterday that the blueprint would be submitted in another month. An immediate merger of both the organisations would be a disaster and the best alternative now is to have an apex body which would bring the benefit of a notionally common balance sheet, he said.
Synergy and close cooperation is a must for the survival of both organisations. But if both have separate balance sheets the two cannot work together, he said. Explaining why the synergy must be brought about gradually, Sen cited the case of the merger of Vayudoot with IA where problems continue to crop up as a result of the merger of only 1,000 Vayudoot employees with Indian Airlines.
Indian Airlines at present has a fleet strength of 54 aircraft while Air India operates 28. Indian Airlines has considerably trimmed down its fleet by phasing out most of its Boeing aircraft to its subsidiary Alliance Air.
Sen was in Calcutta to kick off the IA corporate training programme Parivartan in the eastern region. The programme is being conducted by Denmark-based Time Manager International (TMI) and has already been launched at the IA headquarters in Delhi.
The concept of an apex body has been devised as an alternative to the original proposal of a holding company which had the disadvantage of not having a common balance sheet. The apex body would involve a common top management with the various units autonomously run by separate chief executives.
The apex body would only deliberate on important policy matters covering more than one organisation and would have the right to issue directions. For the day-to-day running, the individual organisation Indian Airlines, Air India and Alliance Air would function as separate companies.
Sen also commented on the declining performance in terms of service by Indian Airlines staff over the past three months with the elimination of some competition in the domestic aviation scene.
The IA management has accorded top priority to human resources development this year, he said.
During the current financial year, the airline expects to touch a net profit of Rs 45 crore as against a projection of Rs 95 crore. It is however significant that this is the first time after eight years that the national carrier will be recording a profit.
Aircraft utilisation has also seen an improvement during the year as a result of which operating profit has increased to Rs 78.80 crore for the period ending December 1997.
In a bid to solve the workload shortage problem at the Calcutta hub, IA has decided to undertake all major maintenance work for 100 seater aircraft at Calcutta. This was announced by IA chief P C Sen yesterday. This would be an important development for the Calcutta station which has an acute problem of manpower without enough functions.
The maintenance work will be done mostly on Boeing 737s.