The committee's report, which was tabled in Parliament on Thursday, says that a merger will ensure optimum utilisation of resources available with the two national carriers.

It has further suggested that till a merger takes place, a joint operation of the two carriers' fleets and manpower be considered to avoid any duplication in operations.

The committee's suggestions are bound to cause embarrassment to the Government as the aviation ministry is against the merger and had, in December, sacked the entire board of the airlines for going ahead on the issue without consulting the ministry. The former IA managing director PC Sen was also removed from his post.

The board had accepted AF Ferguson's report on a phased merger of the two airlines. Union minister for civil aviation AnanthKumar had stated at that time that a merger would delay the proposed Government disinvestment in IA and AI. Later, the ministry set up committees to ensure co-operation between the airlines in specific areas.

The 45-member Parliamentary Committee is headed by Vijay Kumar Malhotra of the ruling Bharatiya Janata Party. Its other members include Jayanthi Natarajan, former state minister for civil aviation, Janardhan Poojary and PC Chako of the Congress and Omar Abdullah f the National Conference.

In another major recommendation, the panel has said that Air India should purchase and fly separate aircraft for VVIP flights so that regular flight schedules do not get interrupted. The committee found that the Government owes the flag carrier Rs 8.76 crore for operation of VVIP charter flights.

For restoring the financial health of Air India, the committee has recommended that the airline's equity base be widened so that it can build-up debt. The panel has also suggested that the Kelkar committee report on AI'srecast be completed at the earliest as every single day of delay is costing Rs 1 crore to the national exchequer.

To reduce the excess manpower in the airline, a complete ban on fresh recruitment has been recommended. All surplus staff should be recalled from foreign stations and utilised in the engineering or catering department, the report says. The committee has also called for an early decision on purchase of new aircraft by AI, besides suggesting that any surplus funds that the airline earns in the future be ploughed back in creating assets.

Air India should also cut down flying on uneconomical routes and should concentrate on flying cargo on routes with low passenger loads, the report says.

The committee has also suggested that the airline should appoint general sales agents, wherever necessary, and a strict check be kept on them to curb malpractices.