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Ananth Kumar rules out merger of IA and A-I, hints at management recast

The public sector Indian Airlines has earned a profit of Rs 470 million during 1997-98 and was expected to make considerable profit this year also, Union Aviation Minister Ananth Kumar said in Bangalore.

He said the government had accepted the Kelkar Committee report which recommended, among other things, restructuring of Indian Airlines and Air-India at a cost of Rs 4.75 billion, including one time soft loan of Rs 2 billion.

He said efforts would be made to ensure synergy between the two organisations to ensure operations more effectively. Both AI and IA together have 73 aircraft and if they operated jointly, it would be better. A-I had been incurring losses for three years, he added.

Kumar ruled out merger of IA and A-I said IA would be disinvested to the tune of 51 per cent, with the government's hold being 49 per cent. Similarly, A-I would also be disinvested to an extent of 50 per cent. Both the organisations would have restructured managements, he added.

On the proposed international airport at Devanahalli, he said the Centre had, in principle, cleared the Rs 20 billion project. However, the Tata consortium was keen on having another feasibility study, which was now in progress.

He said the civil aviation ministry had been spending Rs 350 million to upgrade the Hindustan Aeronautics Limited airport to international standards. It would continue to function even after the setting up of the new airport at Devanahalli as he felt that the city should have two international airports.

UNI

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