Less than a month from now, Indian as a brand and Indian Airlines as a company, will fold up. The merger of the two public sector behemoths – IA and Air India – will give birth to Air India as a brand and National Aviation Company of India Limited (NAICL) as the organisation.

The first international flight from the synergized entity will take off from Mumbai to New York (non-stop) on August 1, complete with the new livery, new uniform for its cabin crew, new inflight entertainment system but with the good old Maharaja as the mascot. Over a week before that, the two PSUs will begin operating as one company from July 24.

With an eye to take on competition, the government which decided to merge the two airlines, is now into the thick of things, to make it emerge as a major carrier.

Merger
After the Union cabinet gave the go-ahead for the merger in February, 2007 and appointed the CMD in May in senior IAS officer V Thulasidas, the two airlines are now finalising the outcome of several strategic business units it has set up to give shape to the amalgamated company. They include: cargo, engineering, marketing, ground handling, low cost sector, network etc.

While the unified entity’s head office will be in Mumbai, its registered office will be in Delhi.

The NAICL will shortly put into operation the route rationalisation programme – especially on the Gulf and South East Asia routes in which Indian is also flying.

Route rationalisation alone is likely to save the organisation close to Rs 200 crore annually.

The overlapping flights to Kuwait, Oman, Singapore, Bangkok, Kuala Lumpur, Hong Kong and Tokyo will be synergized progressively from this winter. The integrated reservation system will be a major challenge.

A senior Indian official noted that either the existing AI system will be upgraded or the new organisation would go for a new system

Integrated call-centre
For a few months from now, the two airlines will have to operate on the separate, existing systems. Eventually, there will also be an integrated call-centre and website.

With IA and AI having ordered 111 new aircraft (68 for AI and 43 for IA), the fleet of the combined company will be one of the largest in Asia. However, even this may not be enough for it to address the growing traffic demand.
As Thulasidas has maintained, the new carrier may require another 60 aircraft.  This would include roughly 30 each of the narrow and widebodied machines which may cost about $ 7 billion.At present, the fleet strength of the two airlines is roughly 115 aircraft.

However, with the fleet aging, the merged company will return several of its leased aircraft and phase out some by converting them into cargo planes.