Parliamentary panel slams govt for hasty decision on airlines merger

Slamming the government for deciding on the merger of Air India and Indian Airlines without homework and in haste, a Parliamentary Committee today asked the Centre to write off all its losses, saying these were caused primarily by "irrational and misplaced" policies.

In another major recommendation, it said the National Aviation Company of India Ltd (NACIL), which now runs the merged entity, should be converted into a holding company with NACIL-A and NACIL-I as "separate functional units".

Observing that Air India should defer its aircraft-buying plan "to reduce the debt burden", the Parliamentary Standing Committee on Transport, Tourism and Culture also recommended a probe into the plan "to fix responsibility for taking such ambitious decision that has become a big financial liability".

On the March 2007 merger between the two national carriers, the committee, headed by CPI(M) leader Sitaram Yechury, said the decision was "taken in haste, without required homework and consultations. As a result, the entire process has, in fact, been unduly delayed, if not derailed."

It said that the 31-member panel was of the firm view that NACIL's turnaround was "not possible by shifting the burden of the crisis on to the shoulder of the employees and blaming them for the ills of the company."

"The committee, therefore, has recommended that as a first step the government should write off the entire loss suffered by NACIL as the loss was due to the policy directions of the ministry of civil aviation".