New Delhi: India completed the merger of state-run carriers Air-India Ltd and Indian Airlines Ltd, saying the combined entity is one of the Top 30 in the world in terms of fleet.
Air-India, as the merged carrier will be known, will have 112 Boeing Co. and Airbus SAS planes and will be run by the National Aviation Co. of India Ltd, the civil aviation ministry said in an emailed release on Friday.
The merger will save Rs800 crore ($194 million) a year and won’t lead to any job losses for the 34,000 employees employed by both the airlines.
The ministry of company affairs has approved the merger.
Air-India will compete with Singapore Airlines and Emirates that have expanded operations in India. Rising disposable incomes and the start of new private airlines, in the world’s second fastest growing major economy, have fuelled growth in business and leisure travel, spurring Indian carriers to order more than 450 aircraft in the past two years.
Air-India will induct 21 new planes this year, the civil aviation ministry said. This will include 11 planes from Boeing and 10 from Airbus.
Air-India, which was the nation’s biggest overseas carrier, along with its budget unit, Air- India Express, ordered 68 planes from Boeing in January 2006 to expand flights into countries such as the US and Canada.
By 2011, Air India will have as many as 135 planes, V. Thulasidas, who was named chairman of the merged airline, said on 22 August.
Vishwapati Trivedi, who was chairman and managing director of Indian Airlines, will be joint managing director of the new airline.
Indian Airlines, until now the third biggest domestic carrier, has placed an order for 43 planes from Airbus to expand services and regain market share from legacy and low-fare rivals such as Deccan Aviation Pvt. Ltd.
The number of air travellers rose 24% to 73.4 million in the fiscal year ended 31 March, 2006, according to the civil aviation ministry.
That figure probably grew to 86.8 million, including 60.9 million domestic passengers, in the year ended 31 March, the ministry said.
Air-India will benefit from the combination of the assets, infrastructure and manpower of the two airlines, the ministry said.
The domestic and international operations of the newly formed airline would be integrated.