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merger of two co.

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Title: merger of two co.


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Merger of AirIndia and Indian airlines
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Presented by
Danish
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Amalgamation of Air India Limited and Indian
Airlines Limited with National Aviation Company
of India Limited.
The Government of India, on 1 March 2007,
approved the merger of Air India and Indian
Airlines. Consequent to the above, a new Company
viz National Aviation Company of India Limited
(NACIL) was incorporated under the Companies Act,
1956 on 30 March 2007 with its Registered Office
at Airlines House, 113 Gurudwara Rakabganj Road,
New Delhi.
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The Certificate to Commence Business was obtained
on 14 May 2007.  Presently, the Board of NACIL
consists of
  • Shri Raghu Menon, Addl Secretary Financial
    Advisor, Ministry of Civil Aviation
  • Shri R K Singh, Jt Secretary, Ministry of Civil
    Aviation
  • Shri Rajiv Bansal, Director, Ministry of Civil
    Aviation

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The Scheme of Amalgamation of Air India Limited
and Indian Airlines Limited with National
Aviation Company of India Limited was approved by
the Board of Directors of all the three
Companies.
Thereafter, the Meetings of Secured and Unsecured
Creditors of Air India  and Indian Airlines were
held in New Delhi on 28 June 2007, in which the
Scheme of Amalgamation was approved by the
Creditors.  The final hearing of the merger
petition was held on 31 July 2007 wherein the
last date for submissions of objections was fixed
on 8 August 2007  and the Order of the Ministry
of Corporate Affairs is awaited.
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The Authorised and Paid-Up Share Capital of the
merged entity will be Rs.1500,05,00,000/- and 
Rs.145,00,00,000/-, respectively
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FAILURE OF THIS MERGER
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The biggest mistake relating to Air India was the
decision to merge the erstwhile Indian Airlines
into the flagship carrier. In 2007, in its report
on the national carriers, Accenture had
highlighted two factors as being responsible for
their sub-optimal performance an ageing fleet
and the fact that the two existed individually.
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The merger itself was hastily carried out. The
pilots of the erstwhile Indian Airlines were
promised parity with Air India pilots. For three
years, nothing was done about it. Discontent
built up. Praful Patel managed to keep it in
check while he was minister, thanks to constant
negotiations. After all, if you have been
promised something, you do expect it. The pilots
were in a position to protest, unlike the cabin
crew, ground staff and maintenance crew. Now,
instead of looking for ways to resolve
differences with the pilots who are on strike,
the Air India management and particularly Jadhav
has decided to "teach the pilots a lesson".
Matters have worsened to such an extent that even
the executive pilots of the airline, who are
management cadre pilots, have gone on strike in
support of their colleagues.
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When Jet Airways pilots went on strike a few
years ago, I remember Naresh Goyal, the airline's
chairman, talking to pilots and pleading with
them to go back to work. But Jadhav has decided
that he will not even talk to the pilots. Even
the Delhi High Court has noted this fact. It
appears that the management wants to make the
pilots scapegoats for its successive failures. It
was looking for an alibi and feels that the
pilots have provided it one.
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There is a severe shortage of trained commanders
across Indian carriers and this has been forcing
airlines to hire expatriates - often those with
less than the best skills. If Air India sacks the
striking pilots they can easily get jobs in other
airlines within three months. But the pilots want
to work for Air India. They, however, also want
their dues. In Parliament, we were told that Air
India loses Rs 20 crore a day. It is surprising
then the management is fighting over what is
essentially a matter of a few crores.
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Thankyou for watching
THE END
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