Accenture speeds up A-I, IA merger

New Delhi, Jan 22 | Updated: Jan 23 2007, 05:30am hrs
Even though an empowered group of ministers is yet to take a final call on the proposed merger of Air-India and Indian Airlines, global consultant Accenture has already begun working on the second stage of the two carriers integration. This is according to highly placed government sources.

After providing four different options for the merger, Accenture, which was appointed for this purpose, has started to move on the amalgamation of the senior management of the two state-owned carriers. A special committee has been set up under Amod Sharma, director, personnel, Air-India, to look into this. Civil aviation minister Praful Patel is keen on the government approving the merger before the end of the current fiscal. Patel wants human resources issues to be resolved as early as possible as they are being touted as the biggest hurdle on way to merging the two entities.

Air-India has 15,416 employees and Indian Airlines has over 18,300. The merged entity will be headed by a group CMD and have a board of directors. One-third of the board will be independent members who will be neither from Air-India nor Indian Airlines. The board will oversee six different business units for commercial passenger operations, MRO, cargo, ground-handling and in-flight services. As mandated by the GoM in its second meeting on January 15, Patel met the representatives of the employees of both the airlines on January 17. The minister is said to have explained to them the post-merger benefits and the reason behind the move. Detailed discussions were held on HR issues. Employees were assured of their future prospects and their apprehensions were addressed. The employee representatives were also assured that the merger would involve no retrenchment, no cuts or losses in pay, perks or allowances.

The other major issues are tax exemptions and the high stamp duty incidence. Though the minister has said that the proposed cost of merger is between Rs 150-200 crore, analysts believe the bill will run into many hundred crores.