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Post Info TOPIC: AI and IC merger-Inside Talk


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RE: AI and IC merger-Inside Talk
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I feel this msg has been posted twice.. right

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karatecatman wrote:

Three consultants for Air-India, Indian merger shortlisted




Good - some forward movement on the merger. This is really strongly needed, or the GoI should privatize both carriers and let them fight with each other.

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karatecatman wrote:


Three consultants for Air-India, Indian merger shortlisted  


Link please, I want to read the full article!!



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Aseem wrote:


karatecatman wrote: Three consultants for Air-India, Indian merger shortlisted   Link please, I want to read the full article!!


It's the full story.


Story was posted twice as there were two similar threads.


Didn't want to leave one incomplete so posted it twice. Actually there are a few similar threads in this Forum.


 



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avoiding double thread is another thing I need to keep in mind.  Currently, both the threads have progressed sufficiently, so would be incorrect to block either of them.


rgds


VT-ASJ



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Posted by LAXDESI on A.net:


Air-India to wing it into Star Alliance.

Link
Quotes:
MUMBAI: After years of being a standalone carrier in the international aviation industry where airlines are rapidly aligning in various groups, Indian flag carrier Air-India is all set to join the Star Alliance. A top-level Star Alliance team, led by the CEO Jaan Albrecht, is currently at the Air-India headquarters in Mumbai for discussions on the modalities of the inclusion.

All of Star’s 18-member airlines have to approve the entry. Air-India’s entry is likely to be championed by Star Alliance founder member Lufthansa, which already has a close relationship with the Indian carrier through codesharing.

The Star Alliance CEO has earlier said that “India, Russia and China are white spots on the Star alliance network that need to be filled.” Star Alliance, the world’s largest airline grouping, currently runs 16,930 daily flights to 842 airports in 152 countries around the world.

Elaborating on the major benefits of the alliance for Air-India, airline sources said it would lead to a partnership with member airlines on issues ranging from marketing to joint sourcing of spares and fuel, potentially leading to a huge saving of millions of dollars.

Member airlines have an integration of airline frequent flier programmes, which is a major marketing tool for airlines. Miles can be earned and redeemed on all members of the Alliance at the same level. Premium customers have access to all members’ airport lounges. As the integration among members progress, flight schedules are co-ordinated to permit almost seamless travel which may include several different carriers within the alliance, on a single ticket.

Over the years Air-India’s global network has shrunk such that it is now largely focussed on the Gulf, parts of western Europe and four cities in the United States. The entry into the alliance will allow it to offer a much larger choice to its passengers. Air-India is also scheduled to begin a huge expansion resulting in the induction of 68 aircraft worth over $11bn over the next six years. The airline’s marketshare that has gone down to about 19% of the Indian overseas passenger market is expected to improve substantially.

“The merged entity formed after the merger of Indian Airlines and Air-India will eventually find place in the alliance that provides the widest airline network in the world today,” a highly placed Air-India source said. However, the process of integration into the alliance could take up to a year after it is approved. South African Airways was the most recent airline that joined the alliance in April this year. Airlines have to upgrade systems to certain common standards before the entry is permitted.



Good news! I hope this moves fast - and does not take the standard 3-4 years that AI might stretch it to!

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152 airports?


Thats enough for a world tour...AI hurryup



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I-Sec led consortium said to be A-I’s merger consultant
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http://www.financialexpress.com/fe_full_story.php?content_id=133578
I-Sec led consortium said to be A-I’s merger consultant 
 
According to experts, the merger will help Air-India to compete with global carriers and will result in a $ 3.5 billion company 
 
SAGAR MALVIYA
Posted online: Wednesday, July 12, 2006 at 0000 hours IST
 
       
 
 
MUMBAI, JULY 11:  A consortium led by ICICI Securities with financial institution Deloitte Touche Dohmatsu, investment bank N M Rothschild, law firm M V Kini & Co and the Centre for Asia-Pacific Aviation (CAPA) is likely to be appointed as a consultant for the proposed merger of the country’s flagship carriers Air India and Indian Airlines.
The final decision is pending a high-level committee meeting, slated July 14, 2006.


However, an Air-India spokesperson denied selecting the final consultant. The other short-listed consortia were Accenture with Ambit Corporate Finance, JM Morgan Stanley and AT Kearney with Amarchand Mangaldas.


The three parties were given the detailed terms of reference to enable them to submit their final technical and financial bids. Interestingly, N Vaghul, chairman emeritus, ICICI Bank is a member of the high-level committee. It is also worth noting that M V Kini & Co, who are part of the consortium, were the solicitors to Air India for the landmark case - Air India Cabin Crew Association vs Yeshawinee Merchant.


Earlier, Air-India chairman and managing director V Thulasidas had said the selected consultant was likely to be given three months to prepare the roadmap for the merger. The consultant would also suggest whether, how and when the public sector airlines would enter the capital market through an initial public offer (IPO) to raise resources. The government had given a formal consent to merge the two entities in April this year.


According to industry experts, the merger will help Air-India to compete effectively with global carriers. It will result in a $ 3.5 billion company with a fleet size of 130 aircraft. The merged entity will also have a huge workforce of about 35,000 employees.


 


CAPA?? Kapil Kaul is reported to be quite shady. Hope this is not a mistake.



 



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Air India offically has denied such a move.

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karatecatman wrote:

Kapil Kaul is reported to be quite shady. Hope this is not a mistake.
 



KCM - any details on the "shadiness" of Kapil Kaul?

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Leaks data room info to rival airlines.


Is " uncomfortably close" to the powers that be in the Ministry, whcih is why is quoted in paragraphs at every media briefing on the situation in India. 


What Amar Singh is to Bollywood is what KK is to media circles. 


Alleged dealings in airport contracts in the Far East.


Just hope AI doesn't have to deal with him.


 



-- Edited by karatecatman at 18:56, 2006-07-13

-- Edited by karatecatman at 18:58, 2006-07-13

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Thanks for the input! KK is certainly in pretty much any media report on Aviation in India.

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Merger Maker
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http://www.financialexpress.com/fe_full_story.php?content_id=134027
v thulasidas
 
Merger Maker 
 
The Air India chief has the toughest job in Indian aviation: merging two airlines losing market share
 
VIVEAT SUSAN PINTO
Posted online: Saturday, July 15, 2006 at 0000 hours IST
 
       
 
 
 Can two state-run airlines with a cumulative staff strength of over 33,000, some 130 planes, a complex mix of local and international routes, and governed by a myriad set of pay rules and dated service traditions be successfully merged?
For all the sceptics, there is one determined shoulder pushing hard so that the union of Air India and Indian (formerly Indian Airlines) goes through—V Thulasidas, chairman and managing director of Air India. He is the pointsman aviation minister Praful Patel is counting on to take his ‘merger’ project to fruition.


Patel’s optimism that the merger will be completed this financial year (last year he said the deal would be closed by March 2006) may find few takers, especially, in the two airlines, but Thulasidas is not one of them. ‘‘N Vaghul, chairman of ICICI, Vishwapati Trivedi, CMD of Indian, two persons from the ministry of civil aviation and the director — finance from Air India and Indian on the board committee appointed for selecting a consultant for the merger are at work,’’ he says, hinting at steady progress.


The committee met Friday to finalise the adviser on the merger as a first step towards the amalgamation. The coming together of India’s two large public-sector carriers is nothing short of a logistical nightmare.


With over 250 employees to each plane in its fleet, the Air India-Indian combine will be among the most bloated carriers in the world. And, then, there is the issue of bridging disparities in remuneration, promotion, transfers and several other niggling HR troubles. Thulasidas knows that the success of the union lies in the ability of the two managements to be able to resolve these issues. He believes in empowering his people. ‘‘I tell them that Air India is their airline. Where do you want to take it? Up or down. If you want the airline to go up then you have to participate in the effort towards it.’’


By some estimates, revenues of the combined entity will be in the region of $3 billion (or Rs 13, 863 crore). Then there is the clout that the airline will wield in the domestic and international market — a point that Thulasidas is not reticent about. ‘‘As a merged entity, we will be one of the largest carriers in Asia. At the moment, Air India is small by international standards. Following the union with Indian, we will be able to take on competition with confidence.’’


At 58, Thulasidas’s energy levels are that of a global airline CEO. Says a close aide, ‘‘Its amazing how he manages to keep up with his schedule.’’


Retirement for the 1972-batch Indian Administrative Service officer is two years away, but Thulasidas isn’t thinking about it yet. ‘‘I have much to do,’’ he says. ‘‘However, if you ask me, I would like to do some serious reading and writing once I retire.’’


Besides work, Thulasidas’s other great passion is teaching. After completing his post-graduate course in English Literature, he took up teaching, while pursuing his doctoral studies in Kerala. But the Air India chairman could not complete his Ph D. because civil services beckoned. ‘‘I may even take up teaching, which I thoroughly enjoy, on retirement. My life as an academic was a pleasurable experience,’’ he says.


Belonging to a middle class Keralite family, values of hard work and dedication came early for Thulasidas. ‘‘My father was a teacher. I guess he imparted these values in me.’’


Having grown up in the 60s, an intellectually stimulating period characterised by a certain rebelliousness and gay abandon, the ‘flower child’ in Thulasidas retains a deep consideration for fellow workers. Following the July 26 torrential rains in Mumbai last year that created havoc for the average citizen, residents of the flooded Air India colony in the Santa Cruz suburb of Mumbai recall how Thulasidas came to check how he could help.


‘‘I got typhoid during my trips to the colony around the time of the floods,’’ he says sitting in his spacious office next to the domestic airport in Mumbai. ‘‘I just had to go there. The water levels were dangerously high. There was no food, portable water or electricity. We couldn’t leave our people in a situation like that.’’


Air India and Indian employees, it would be hoped, would be as considerate to their boss as he slogs on the merger.


 


A PR piece? Nothing at all about the problems in the merger.
        
 



-- Edited by karatecatman at 14:02, 2006-07-15

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AI-IA merger path set
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http://www.dnaindia.com/report.asp?NewsID=1051563
AI-IA merger path set


Praveena Sharma
Wednesday, September 06, 2006  21:50 IST


BANGALORE: If everything goes as per the government’s plans, state-owned carriers Air India and Indian Airlines would have merged by the end of the next financial year.


In a move that depicts the urgency of the government to move forward with the amalgamation of the two carriers, private consultant Accenture India Private Ltd, which has been given to prepare the feasibility report, has been asked to submit the preliminary report on the merger by October 15 for government approval.


According to senior Air India officials, the consultant will have to chart out the merger process within 16 weeks of getting the government clearance.


The plan would be completely executed by March, 2008.


The consultant, though, would continue to be involved in the post-merger integration issues for a further 52 weeks.


The government has appointed a core group, headed by ministry of civil aviation joint secretary R K Singh, to monitor the progress of the effort and coordinate with Accenture.


In addition, it has also constituted four working groups, which will coordinate on the major issues relating to commercial, human resources, finance and operations, engineering and infrastructure arising during the process of merger.


Each of these four groups will comprise five members from the civil aviation ministry, the two airlines and a nominee from Accenture.


“The core group and working groups will meet as frequently as possible at the instance of the consultants. The core group would also review the progress made by the consultants in the merger process,” said Air India company secretary S Venkat.


The merger of the national carriers has been proposed to create an internationally competitive carrier and achieve a better operational efficiency through their inherent synergies. It is also expected to maximise the revenues with improved economies of scale.


After the deregulation of the aviation sector, both the carriers have been facing stiff competition from private airlines on international and domestic routes. Together, the two carriers will be taking deliveries of over 100 aircraft valued at over Rs 44,000 crore in the next few years from the two major aircraft producers - Airbus Industrie and Boeing Co.


Analysts say the success of the merger will largely depend on how well the issues of staff retrenchment and overlapped resources are tackled. 


 


Any talk of retrenchment and the Left will resis. Their support was on the condition that there will be no retrenchment.



 



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Oooh, this will be fun. Praful Patel was betting his hide on getting this done by the end of this FY (Mar 2007), looks like the goal post has been moved out by a year. That's enough time for the govt to change, and for AI/IC to roll back any half hearted moves they may have made towards merger!

I do hope that the MoCA tries to accelerate the merger, and get the high level milestones and formalities sorted out by the end of this FY. The low level implementation can come in the months to follow. This would be similar to the recent US Airways + America West merger, where the announcement/decision was made, and then the actual merger activities are still going on (and following the set timetable).

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What i have heard from AI and IC engg union leaders is that the merger shall take place only at management level and this wont make any difference to the employees.


The basic advantage they can get is in the share market



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Air India, Indian merger to be over by 2006-07: Praful Patel
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http://www.dnaindia.com/report.asp?NewsID=1052383
Air India, Indian merger to be over by 2006-07


PTI
Monday, September 11, 2006  18:08 IST


 
KOLKATA: The proposed merger of state-owned carriers Air-India and Indian is expected to be completed in the current financial year, Civil Aviation minister Praful Patel said on Monday.


He informed that the consultant appointed for this purpose had been asked to submit its report shortly.


In view of the changing dynamics, this merger had to be done. Accenture had been appointed as consultant for the merger process.


Patel said the proposed initial public offer (IPO) of Indian would be done after the merger.


Merril Lynch had been entrusted to carry out valuation for Air-India.


 


Why Indian's IPO alone? Doesn;t seem to be an outright merger then. Indian seems to be retaining its own identity. Same case with AI, if the recent comments of the 2 CEOs are to be taken seriously.


What 380 says has some sense in it. 
 



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karatecatman wrote:



Leaks data room info to rival airlines.


Is " uncomfortably close" to the powers that be in the Ministry, whcih is why is quoted in paragraphs at every media briefing on the situation in India. 


What Amar Singh is to Bollywood is what KK is to media circles. 


Alleged dealings in airport contracts in the Far East.


Just hope AI doesn't have to deal with him.


 



-- Edited by karatecatman at 18:56, 2006-07-13

-- Edited by karatecatman at 18:58, 2006-07-13




One Big C($* is that KK of CAPA.


Churan ki dukan hai yaar.


Jahan dekho Pakana Chalu.


TV per aane ko bahut accha lagta hai.....


It seems many airlines have WARNED him not to enter their offices in the capital



-- Edited by JumboJet at 02:55, 2006-09-12

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IA, A-I to shed 1,700 post-merger
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http://www.financialexpress.com/fe_full_story.php?content_id=140571
IA, A-I to shed 1,700 post-merger 
 
NEELASRI BARMAN & SAGAR MALVIYA
Posted online: Saturday, September 16, 2006 at 0000 hours IST 
  
 
MUMBAI, SEPT 15:  State-run carriers Air-India and Indian Airlines will offer a voluntary retirement scheme (VRS) aimed at reducing their staff strength by more than 1,700 employees. A-I has 15,700 employees and IA, 19,300 now. A majority of the employees, who opt for voluntary retirement, are likely to join the maintenance, repair and overhaul facilities being set up in India by Boeing and Airbus, according to sources.
In 2003 and 2004, around 490 employees in IA and 400 in A-I had opted for VRS offered by the companies. But this time around, the outflow of funds for VRS is likely to be higher and the eligibility criteria, to be decided by the civil aviation ministry after the merger, will be different from those used for the previous schemes.


Earlier, the eligibility criteria covered permanent staff of companies - employees who had served continuously for more than 10 years or had attained 40 years of age. But licensed and technical categories were excluded.


The employees were entitled to an amount equivalent of 35 days’ salary for every year completed in service, plus 25 days’ salary a year for the remaining years of employment, or the salary for the remaining period of service, whichever was lower. Both the airlines are estimated to have spent nearly Rs 100 crore on the schemes.


A working group has now been formed to co-ordinate on issues likely to arise during the merger. The group consists of two directors from the ministry of civil aviation, personnel directors of both the carriers and a nominee of the merger consultant.


The civil aviation minister has indicated that the merger of the two carriers will take place in the next fiscal. Accenture with Ambit Corporate Finance has been appointed as the consultant to draw a road map for the merger. The merger is expected to help A-I compete effectively with global carriers like British Airways, Singapore Airlines and Qantas Airways.
 



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4,300 more jobs as AI, IA plan to expand
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http://timesofindia.indiatimes.com/articleshow/1998642.cms
4,300 more jobs as AI, IA plan to expand
Shobha John
[ 17 Sep, 2006 0017hrs ISTTIMES NEWS NETWORK ]
 
 
RSS Feeds| SMS NEWS to 8888 for latest updates


NEW DELHI: The aviation job market in India is all set to boom. Even as new kids on the block vroom impatiently on the sidelines, aviation behemoths AI and IA are all set to rock the skies with 111 mint-fresh planes and an additional 4,300 jobs in key categories such as pilots, engineers and cabin crew over the next few years. Both airlines have made detailed plans in this regard.


In fact, a look at just the growth of these two airlines which, till now, were struggling to stay ahead of the wannabes with leased and old planes, gives an indication of what India, among the fastest aviation markets, is poised for.


Boeing forecasts say India will require close to 500 new aircraft over the next 20 years with a total value of around $36 billion.


Yes, infrastructure glitches will continue for some time, but the customer will continue to be king.


AI placed one of the largest commercial airplane order in India's civil aviation history with 68 Boeings (50 for Air India and 18 for Air India Express) in December 2005, valued at over $11 billion. Delivery of this assorted mix of 23 777s, 27 787s and 18 737s is scheduled to begin in November 2006.


"Air India alone, over the next seven years, will require 700 additional pilots. Total cabin crew numbers till 2012 will stand at 4,974 for 58 AI planes," says an AI spokesman.


"To meet the shortage of pilots, Air India has adopted the following strategy: induction of trainee pilots from the open market and Indira Gandhi Rashtriya Udaan Academy, Rae Bareli; recruitment of foreign pilots and co-pilots on contract, recruitment of science and engineering graduates who will be trained for commercial pilot licences;
extension of contract for retired Air India pilots till 65 years and induction of Indian Air Force pilots on deputation," he says.


At Indian Airlines too, many jobs will be up for grabs. It had inked a deal to buy 43 Airbuses for $2.2 billion and will get its new fleet of 19 A319s, four A320s and 20 A321s on a staggered basis.


"Recruitment of additional work force has been worked out, keeping in mind aircraft delivery schedules and has been going on for almost a year," says a spokesman.


"The total plane strength in the next four years will be under 100." Old and leased planes will be phased out.


"The airline may also need to recruit flight dispatchers, ground handling and passenger handling staff, though this would largely depend on policies regarding airport handling and the impending merger of IA and AI," the spokesman says.


In the intervening period, to ensure greater productivity, IA signed an agreement with its pilot's union to increase flight and duty timings and number of landings.


Rest period was also decreased, keeping DGCA norms in mind. "Retiring pilots will also be kept on contract till
65 years. Indian Airlines has also approached the government for similar contracts for AMEs and flight dispatchers," he says.


With the induction of the new fleet, IA also expects to increase its present market share of 22%. The skies are truly opening up for high-flying jobseekers. 
 



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