Modi government to allow holding company structure for Air India

Bidders have termed the condition as onerous; they feel it potentially rules out a merger of operations with a group's existing brands

A new owner of Air India will be allowed to operate the airline under a holding company. The entity will also be permitted to co-opt its existing airline brands under the holding company to build synergy.

This, the government believes, will allay concerns of potential suitors about the bidding condition, which mandates operating Air India at arm’s length for three years.

“We had discussions over this clause; the transaction advisor studied airline merger cases and suggested that a holding company structure should be allowed,” said a person involved with the process.

“Suppose a potential suitor has two existing airlines, A