Air-India/Indian merger

[Saddle Bronc 124]

BBC link

Indian state airlines in merger

India's two main state-owned airlines are to merge in an effort to compete more effectively with private carriers.

Air India and Indian Airlines will join forces by the start of April, ministers said - adding that the merger would not result in any job losses.

Officials said the deal would make the new entity more competitive, yielding annual savings of 5bn rupees ($113m).

Privately-owned rivals such as Jet Airways and Kingfisher Airlines have taken market share from the duo.

'Appropriate step'

The Indian government hopes that the combined firm will become one of the world's top 20 airlines.

"Everybody feels the process of merger is appropriate," said Praful Patel, India's civil aviation minister.

Set up in 1932, Air India is the country's flagship airline, serving more than 40 destinations worldwide.

Indian Airlines is focused on the domestic market.

Air travel has been growing rapidly in India as income levels rise and long-established players such as Air India and Indian Airlines have been challenged by more recent entrants.

There are now four budget airlines operating in India.

Note: the article is using information at least 13 months outdated (the name "Indian Airlines" was changed to simply "Indian" 2005-12-07). Also, this is one of umpteen attempts at merger--and like the previous ones, it's gonna fail!

[Nikita2Charles 33]

I am a frequent flyer with Air Deccan, Their prices is very competitive compore to Indian airline or Jet airways, Hopefully more competions means even lower fare, but I doubt it as the effect of Merger is to reduce competition eventually you will see the price increase in the long term.

[Saddle Bronc 124]

I am a frequent flyer with Air Deccan, Their prices is very competitive compore to Indian airline or Jet airways, Hopefully more competions means even lower fare, but I doubt it as the effect of Merger is to reduce competition eventually you will see the price increase in the long term.

Not much to worry about here; Indian and A-I have been talking mergers on-and-off since 1986 at least--and none has panned out as yet.

As far as fare increases, you have heard of the law of supply-and-demand?