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Air India And Indian Airlines May Merge  
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48
Posted (8 years 5 months 4 days 4 hours ago) and read 4986 times:

Air India, Indian Airlines may merge after IPOs at the end of 2006. I think this is worthy of its own thread. This item is also linked in the Indian thread:Part 10 by Airish. Link:
http://www.hindustantimes.com/news/181_1630599,00020016.htm

Quotes:
State-owned carriers Air India and Indian Airlines may be merged after their initial public offerings are completed, Minister for Civil Aviation Praful Patel said on Monday. A merger could help raise the competitiveness of the airlines against privately owned carriers, Patel told reporters on the sidelines of an aviation conference in Singapore.

"We are looking into synergizing the operations of Air India and Indian Airlines to make them stronger carriers, but we haven't decided on the structure (of a merged carrier)." A final decision on the merger will be made later this year, the minister said. Indian Airlines is primarily a domestic carrier with a small number of foreign destinations, while Air India travels is an international airline.

Patel said Air India will delay its planned IPO by at least two months as the final details of the offer are still being negotiated. "Air India's IPO has been delayed...we now expect that (both) IPOs will be brought out to investors by May," Patel said. "We are looking at about 20 per cent to 25 per cent public ownership of the companies."

Financial details are still being worked out between the airlines and their advisers, and Patel said he expects substantial progress to be made in the negotiations in coming weeks.

[Edited 2006-02-20 17:07:24]

18 replies: All unread, jump to last
 
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48
Reply 1, posted (8 years 5 months 4 days 3 hours ago) and read 4911 times:

Quoting LAXDESI (Thread starter):
Air India, Indian Airlines may merge after IPOs at the end of 2006.

Given the possibilty of a merger, Indian should open up new routes with its expected wide-body leases that would connect to AI's existing network. A good choice would be to connect MAA/BLR to FRA timed to AI's flights to US.

Another thing I do not understand is why it has taken so long for this to come about? From other threads I am left with the understanding that there is resistance from IC to a merger. Why would IC not see an advantage of a merger leading to economies of scale/scope.

[Edited 2006-02-20 18:27:02]

User currently offlineGr8Circle From Canada, joined Dec 2005, 3092 posts, RR: 4
Reply 2, posted (8 years 5 months 4 days 2 hours ago) and read 4893 times:

Hi pal, LAXDESI, you've been out of India too long Big grin

You forget the 10 headed dragon, the great 'Indian' unions (pun intended)....they will fight tooth and nail and make the merger as difficult as possible....even if the whole thing makes a lot of business and commercial sense to everyone else, the only thing these narrow minded unions will see is their jobs at the end of the day....little realising that a combined AI / IC would be a better bet to survive the competition 5 or 10 years down the line....

On another track, it would be interesting to see how the 'good-for-nothing' Communists will react to this...merger of two publuic sector cos....


User currently offlineKkfla737 From United States of America, joined Oct 2004, 1033 posts, RR: 1
Reply 3, posted (8 years 5 months 4 days 2 hours ago) and read 4884 times:

The merger only makes too much sense, but given the decision by IC to buy Airbus and AI to buy Boeing, how will then fleet issues be resolved? I think the 787 was a must for AI because it offers the range and passenger capacity that AI needs for routes to the US.

I think a merger is long overdue. AI needs domestic feed for their long haul int'l routes and more and more AI and IC are needlesly competiting on routes. For example, a few weeks ago when I was at Chennai Airport, AI and IC both had flights bound for Kuala Lumpur leaving within 15 minutes of one another. I know that several other routes exist where both fly, sometimes offering similar fares and similar departure times. Given the strength of 9W in both domestic and int'l sectors and the growing popularity of start up and low cost carriers, it is only logical.

Another question. Why do AI and IC not codeshare on each others routes in many cases, where AI is codesharing with someone else? For example: AI puts its code on the TG flight between MAA-BKK, but do not place their code on IC's competeting flight? Is the relationship between the managments that bad, that they can't work this out?

Quoting LAXDESI (Reply 1):
A good choice would be to connect MAA/BLR to FRA timed to AI's flights to US.

A very good idea. AI currently places its code on LH's MAA/BLR/HYD-FRA flights.


User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48
Reply 4, posted (8 years 5 months 4 days 2 hours ago) and read 4832 times:

Quoting Gr8Circle (Reply 2):
the only thing these narrow minded unions will see is their jobs at the end of the day....little realising that a combined AI / IC would be a better bet to survive the competition 5 or 10 years down the line....

Exactly my thought.

Quoting Kkfla737 (Reply 3):
For example, a few weeks ago when I was at Chennai Airport, AI and IC both had flights bound for Kuala Lumpur leaving within 15 minutes of one another. I know that several other routes exist where both fly, sometimes offering similar fares and similar departure times.

Why not use a larger aircraft post-merger and use the narrow bodies on routes to other SE/ME points.


User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 48
Reply 5, posted (8 years 5 months 4 days 1 hour ago) and read 4812 times:

Quoting Gr8Circle (Reply 2):
On another track, it would be interesting to see how the 'good-for-nothing' Communists will react to this...merger of two publuic sector cos....

After the loss over airport modernization strike, the left is likely to support a merger that can only strengthen the two airlines. I am sure they will demand job guarantees in exchange for their support. Given the explosive growth in aviation sector, it may make sense to offer a 3 year job guarantee as was done for AAI employees.


User currently offlineDIJKKIJK From France, joined Jul 2003, 1783 posts, RR: 4
Reply 6, posted (8 years 5 months 4 days 1 hour ago) and read 4777 times:

Quoting Kkfla737 (Reply 3):
A good choice would be to connect MAA/BLR to FRA timed to AI's flights to US.

Doesn't AI already operate BOM-HYD-FRA-ORD and BOM-BLR-FRA-USA(don't know which destination)?



Never argue with idiots. They will bring you down to their level, and beat you with experience.
User currently offlineKkfla737 From United States of America, joined Oct 2004, 1033 posts, RR: 1
Reply 7, posted (8 years 5 months 4 days 1 hour ago) and read 4770 times:

Quoting DIJKKIJK (Reply 6):
Doesn't AI already operate BOM-HYD-FRA-ORD and BOM-BLR-FRA-USA(don't know which destination)?

Yes, but most business fliers from BLR, MAA or HYD DO NOT want to stop in Mumbai. Air India has a very low market sahre on flights from South India to the USA.


User currently offlineAseem From India, joined Feb 2005, 2046 posts, RR: 10
Reply 8, posted (8 years 5 months 4 days 1 hour ago) and read 4760 times:

Quoting LAXDESI (Reply 1):
A good choice would be to connect MAA/BLR to FRA timed to AI's flights to US.

good thought but let me tell you such synergies won't happen before the actual merger. Don't forget its the latent inertia within these organizations that is the biggest impediment. Had it not been the case, then synergy would have been possible without actual merger. So hold on for now!!

Quoting Kkfla737 (Reply 3):
The merger only makes too much sense, but given the decision by IC to buy Airbus and AI to buy Boeing, how will then fleet issues be resolved?

not a big issue at all. AC has narrowbody fleet of Airbus and will have widebody fleet of Boeing. When merged, AI and IC will look pretty much the same.
rgds
VT-ASJ


[Edited 2006-02-20 20:15:34]


ala re ala, VT-ALA ala
User currently offlineDIJKKIJK From France, joined Jul 2003, 1783 posts, RR: 4
Reply 9, posted (8 years 5 months 4 days 1 hour ago) and read 4750 times:

Quoting Kkfla737 (Reply 7):
Yes, but most business fliers from BLR, MAA or HYD DO NOT want to stop in Mumbai

BOM-HYD-FRA-ORD doesn't stop in BOM. It flies directly from HYD to FRA.

As does BOM-BLR-FRA-ORD

edited:

Sorry, I am wrong.

[Edited 2006-02-20 20:16:43]


Never argue with idiots. They will bring you down to their level, and beat you with experience.
User currently offlineAseem From India, joined Feb 2005, 2046 posts, RR: 10
Reply 10, posted (8 years 5 months 4 days 1 hour ago) and read 4724 times:

According Indian Express, PP says that it will be finalized before the end of this year. If he makes it possible, then I'm sure he'll down in history as the best Civil Aviation minister we've had.
rgds
VT-ASJ



ala re ala, VT-ALA ala
User currently offlineMD90fan From Bahamas, joined Jul 2005, 2931 posts, RR: 7
Reply 11, posted (8 years 5 months 3 days 23 hours ago) and read 4649 times:

If they merge they should be pretty strong in the gulf  Smile Can somebody name all the India-Gulf routes they'll fly?


http://www.devanwells.blogspot.com/
User currently offlineGr8Circle From Canada, joined Dec 2005, 3092 posts, RR: 4
Reply 12, posted (8 years 5 months 3 days 22 hours ago) and read 4630 times:

Quoting MD90fan (Reply 11):
If they merge they should be pretty strong in the gulf Can somebody name all the India-Gulf routes they'll fly?

Muscat
Dubai
Sharjah
Abu Dhabi
Ras Al khaymah
Bahrain
Dammam
Riyadh
Jeddah
Kuwait
Doha

From India :

Mumbai
Delhi
Bangalore
Hyderabad
Kochi
Calicut
Thiruvanathapuram
Chennai
Ahmedabad
Kolkata
Pune
Nagpur


User currently offlineN328KF From United States of America, joined May 2004, 6483 posts, RR: 3
Reply 13, posted (8 years 5 months 3 days 22 hours ago) and read 4606 times:

If their intention is to merge, there is no need for both to IPO. One can IPO, and then they can merge. This performs both tasks and saves one of them the costs of IPO. Note that this is how Aerospatiale went public.


When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
User currently offlineJaysit From , joined Dec 1969, posts, RR:
Reply 14, posted (8 years 5 months 3 days 18 hours ago) and read 4499 times:

Quoting Gr8Circle (Reply 2):
You forget the 10 headed dragon, the great 'Indian' unions (pun intended)....they will fight tooth and nail and make the merger as difficult as possible....even if the whole thing makes a lot of business and commercial sense to everyone else, the only thing these narrow minded unions will see is their jobs at the end of the day....little realising that a combined AI / IC would be a better bet to survive the competition 5 or 10 years down the line....

They don't care about their survival 10 years down the line.
There will always be some political party that will take on their cause and make it their own.
And as far as floating separate IPOs go, which investor with half a brain will invest in either carrier now that the possibility of a merger has been floated?
The GOI is brain dead as usual.


User currently offlineAA1818 From Trinidad and Tobago, joined Feb 2006, 3429 posts, RR: 4
Reply 15, posted (8 years 5 months 3 days 17 hours ago) and read 4483 times:

What do IA's and AI's fleets look like?
Are there any other serious competitors besides KingFisher and Jet/ Sahara?
Given routes to the MiddleEast, Asia, Noth America and Europe, will Indian carriers look to Africa, LatAm/ Caribbean (large presence of E. Indidans in Jamaica, Trinidad and Guyana)?
Are both carriers wholly owned by the state?

AA1818



“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
User currently offlineCricket From India, joined Aug 2005, 2966 posts, RR: 7
Reply 16, posted (8 years 5 months 3 days 8 hours ago) and read 4364 times:

The problem is that any merger will have to deal with massive infrastructural issues, post-IPO these issues become worse under SEBI guidelines. Merging or demerging two companies isn't a piece of cake, just look at Reliance, and the government's other 'mega' merger plan BSNL and MTNL, merging them is a nightmare, and most of all there are massive egos involved.


A300B2/B4/6R, A313, A319/320/321, A333, A343, A388, 737-2/3/4/7/8/9, 747-3/4, 772/2E/2L/3, E170/190, F70, CR2/7, 146-3,
User currently offlineGr8Circle From Canada, joined Dec 2005, 3092 posts, RR: 4
Reply 17, posted (8 years 5 months 3 days 5 hours ago) and read 4294 times:

Quoting AA1818 (Reply 15):
What do IA's and AI's fleets look like?

IC has a fleet of A320's (with 319's and 321's on order) and subsidiary Alliance Air has older 732's

AI has a fleet of 744's, 743's, 777's and A310's (with more 772's, 773's and 787's on order), subsidiary AIX has a fleet of 738's

Quoting AA1818 (Reply 15):
Are both carriers wholly owned by the state?

Yes!


User currently offlineNimish From India, joined Feb 2005, 3212 posts, RR: 9
Reply 18, posted (8 years 5 months 2 days 13 hours ago) and read 4152 times:

Given this has been discussed extensively in the, various committees set up, reports submitted, the final plan has always been not to merge the 2 companies. I don't see any chance of this coming through either - we've been through this too many times in the past. Besides as someone commented in this thread, merger is fine and dandy, but operational synergies could be implemented immediately if there was a will. There's clearly no will to merge between the 2 airlines, they're happy to stay as separate as can be.


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