The government is considering several routes like enacting a law or getting a court order or simply issuing an ordinance for merging the two state-owned carriers -- Indian and Air-India, official sources said on Tuesday.
The fastest way to merge the two would be the ordinance route as was done in 1953 when the Air Corporation Act was repealed to create the two public sector airlines, the sources said.
However, a legislation could also be brought in during the Budget Session of Parliament after the Union Cabinet gives its final nod to the proposal of the Group of Ministers (GoM) headed by External Affairs Minister Pranab Mukherjee, they said.
The Committee of Secretaries (CoS), which was asked by the GoM to finalise various options and work out the nuances of the merger process, has already favoured the merger and offered several choices as to how to go about it, they said.
The GoM, headed by External Affairs Minister Pranab Mukherjee, is yet to consider the CoS recommendations and proposals.
Sources said there could be some delay in the process but not an inordinate one as the statutory time-frame has to be met.
The two airlines, they said, would have to give notice to their creditors and lenders about the process going forward.
The civil aviation ministry had set April 1 as the deadline for the merger, which the sources said, could be overshot. This target date was set assuming that the Union Cabinet would accord clearance to the proposal by the end of this month.
When the contract for the global consultant for the merger was awarded to Accenture-led consortium to draw a roadmap for the process, it was decided that the pre-Cabinet work would be completed in 10 weeks and the approvals after the Cabinet nod be obtained within the next 16 weeks.
Meanwhile, the consultant has already started working on the integration of the staff of the two carriers as well as their subsidiaries, Air-India Express and Alliance Air.
However, it is not yet clear as to whether the two subsidiaries would be merged to form a new low-cost airline or would it remain a subsidiary of the merged entity.
In addition, Accenture is to handhold the new merged entity for 52 weeks to ensure that the entire process was completed by March 2008.
The GoM has so far held two meetings and would now consider the recommendations of the CoS. The GoM's recommendations would be placed before the Union Cabinet for its approval.
The civil aviation ministry has assured that there would be no retrenchment of any staffer. The managements of the two carriers have already started consultations with the employees.
