A Parliamentary Committee on Friday slammed the government decision to merge Air India and Indian Airlines, the two State-owned carriers, and blamed the Civil Aviation Ministry for showing little initiative in monitoring the progress of the merger.
In its fourth report, the Committee on Public Undertakings (COPU), headed by Congress MP V. Kishore Chandra S. Deo, asked the government to have separate domestic and international airlines under a single holding company.
The primary aim of the Committee is to address the root causes of malaise afflicting public sector undertakings being examined by it, and to propose ways and means for their revival and effective functioning.
The Committee also recommended fixing of responsibility on “agencies and individuals” who took such a “whimsical” decision and sought “suitable action” to prevent such “intangible loss” being caused to a state-run company.
Describing the merger as “ill-conceived and erroneous,” the Committee said: “The root cause of the ills plaguing the NACIL (National Aviation Company of India Limited) is the ‘merger' which was flawed at its very inception and which never really took off.”
In its report tabled in Parliament on Friday, the COPU said the multiplication of losses suggested “something radically wrong either with the projections of the benefits of the merger or with the implementation of the merger.” These recommendations come two months after the Parliamentary Standing Committee on Transport, Tourism and Culture, headed by CPI(M) MP Sitaram Yechury, found that the decision to merge the two carriers was “taken in haste, without required homework and consultations.”
The COPU recommended converting the NACIL into a holding company under which NACIL-Indian Airlines, with its headquarters in Delhi, and NACIL-Air India with headquarters in Mumbai, would function. Each of the entities should be headed by a Managing Director who would report to the Chairman of the NACIL, it said, stressing that the government should “immediately” work this out.
Asked about the recommendation for “suitable action” against those who decided to merge the two airlines, Mr. Deo told journalists that “accountability has to be fixed. Whoever is responsible has to explain. NACIL is not a personal property. It has to be seen that public money is not misused.”
Answering queries as to whether the formation of a holding company would actually amount to a de-merger, he said it was “technically not so as the NACIL would remain as the holding company and the two airlines would function under it.”
The NACIL should develop “its own Maintenance, Repair and Overhaul (MRO) service as a separate and professional business unit” which would cater to other airlines also, Mr. Deo said.
It should be exclusively assigned to carry out ground handling activities as it had an experienced workforce and decades of expertise. “Any other avenue may be sought only when it is not in a position to carry out the job.”
Strongly favouring protection of the employees' interests, the Committee said there was “a high level of disenchantment and discontentment” regarding the merger and said their basic incentives should be reviewed keeping in mind that they remained loyal to the company and were “forced to accept [allowance] cuts.”
It recommended that pay and allowances of the staffers of the two erstwhile airlines be merged with reference to the scales of pay and not based on their designations.
Stressing that no employee should be placed at a disadvantage at any stage, it said any cut or advancement should be proportionate to the pay scale, and “no unilateral decision” relating to service matters should be forced upon the employees. “A consensual approach should prevail,” it said.
