AI, IA merger root cause of ills plaguing NACIL: Panel

Parliament's Committee on Public Undertakings (COPU) has said that the root cause of all the ills plaguing the National Aviation Company of India Limited (NACIL) was the merger of public sector airlines Air India (AI) and Indian Airlines (IA).

In its fourth report presented to Parliament today by its Chairman V Kishore Chandra S Deo, the committee said that the so-called merger was a kind of marriage between two incompatible individuals having wide variances and hardly any meeting ground.

NACIL was set up by the Government in 2007 to run the loss-making Air India after its merger with Indian Airlines.

The committee recommended that, in order to improve the health of NACIL, it was imperative that it be made into a holding company under which two separate wings - NACIL-Indian Airlines with its headquarters in New Delhi and NACIL-Air India with headquarters in Mumbai will run. Each of the wings should be headed by a Managing Director who shall report to NACIL, it said.

The report said all the losses attributable to merger of IA and AI should be recouped by the Government as the decision of merger was a policy decision spearheaded by the Ministry-in-charge.

The committee said that there was urgent need for route rationalisation and route allocation since prime commercial routes were being allocated to private airlines.

For this purpose, the Ministry of Civil Aviation should conduct a transparent review of the entire route and slot allocations to ensure that NACIL was neither put at any disadvantage nor appeared to be placed in any disadvantageous position, it said.

The committee observed that utilisation of aircraft in the company was at a low of 9 hours per day while the benchmark is at 16 hours per day. It said NACIl should, therefore, take steps to improve the utilisation of its aircraft.

The committee recommended that capital infusion in the ailing public airline had become imperative to make it creditworthy for its operational credit requirements and to salvage the remnants of the legendary airlines.

The committee also emphasised the need for ground handling by NACIL, corporate work culture and training.

The report recommended fair treatment to loyal employees of the airline. It said no unilateral decision on service matters should be forced upon the employees and the genuine aspirations of the officers in each cadre should be addressed judiciously.

The assurance made to the employees before the merger of the two organizations that "no employee would be placed at a disadvantage at any stage" must be fulfilled, the report added.

NNN