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Readying for take-off

A new firm, the National Aviation Company of India Limited (NACIL), will take shape in July, giving effect to the Government of India's decision to merge the two national carriers, Air India and Indian. Union Civil Aviation Minister Praful Patel has announced that the new merged airline, to be called "Air India," will retain the Maharaja as its mascot, to leverage the brand name and identity. The tail of the Air India aircraft will carry the flying swan with the Konark Chakra, combining the logos of the two merged airlines. Mr. Patel has also unveiled plans for NACIL to tap the financial market in 2008 with its first IPO. Fortunately, there will be no change in the aircraft acquisition plans already announced by the two airlines. The merged airline will start getting its new fleet of both Boeing and Airbus aircraft in July and take about 25 aircraft on lease to meet the domestic as well as international demands for the coming winter tourist season. To get into position for the season, Air India is expected to launch its non-stop direct services to New York, from Mumbai and New Delhi, with the acquisition of the long haul Boeing 777 later this year. The next step signalling the way forward in the merger process will be the appointment of a Chairman and Managing Director, with Air India's current chief V. Thulasidas, being a frontrunner for the job.

Now that the Jet Airways-Sahara merger and their reorientation are taking shape, the public sector NACIL will have to unveil its strategy for all the markets — the domestic, low-cost, and international. Air India Express, the low cost subsidiary of Air India, has already commenced operations. But its Indian Airlines counterpart, Alliance Air, is badly in need of overhaul and fleet replacement. The new management will have to rework its strategy to streamline and synergise these operations under a unified framework. The role and dynamics of each of these segments needs to be defined and worked out, so that different arms of the merged airline can function efficiently to meet the overall strategic goals. A greater challenge will be to address the concerns and problems of the staff of the two existing airlines and their subsidiaries. The earlier the management discusses with the trade unions issues such as protection of service, possible redeployment, seniority, and pay scales, the smoother would be the process of merger. For a smooth take-off of the merged airline, it is imperative that NACIL takes all its employees on board.

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