In 2005-06, Air India had a net worth of Rs 403.27 crore, while Indian Airlines has a negative net worth of Rs 217.98 crore. The synergy benefits of the merger will help the new entity get the right price, a government source close to the merger told FE. But for financial year 2006-07, balance sheets of both the carriers remain in the red due to losses.
The merger of the two airlines, with so much complementary roles, will release the true potential of both the carriers and bring greater value to both passengers and investors. In a year or two, the synergy benefits will far exceed the expectations, Air India chairman and managing director V Thulasidas said.
The value of assets is also expected to jump significantly. At present, the combined asset value of the two carriers stands at Rs 4,804 crore, comprising AIs assets of Rs 4687.08 crore and Indian Airliness Rs 117.02 crore. Post-merger, it is likely to increase to one-and-a-half times to Rs 7,176.30 crore. With all the synergies and all the assets we have, some people even say that it is a conservative estimate and could be much more, Indian Airlines CMD Vishwapati Trivedi said.