NEW DELHI: A Parliamentary committee on Friday termed the merger of Air India and Indian Airlines as a "marriage of two incompatible individuals" and slammed the government for the "ill-conceived and whimsical" decision.
The Committee on Public Undertakings (COPU) in its report submitted to Parliament also asked the government to have separate domestic and international airlines under a single holding company.
It 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 report said, "The root cause of the ills plaguing NACIL (National Aviation Company of India Limited) is the 'merger' which was flawed at its very inception and which never really took off." Air India has accumulated losses to the tune of Rs 7,000 crore.
In its hard-hitting report, the COPU headed by Congress leader V Kishore Chandra S Deo said there was "no justifiable explanation for this abrupt haste" to merge the two carriers.
"The so-called merger is a kind of marriage between two incompatible individuals having wide variances with hardly any meeting ground," it said.
It recommended converting 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 NACIL, it said, stressing that the government should "immediately" work this out.
Hitting out at the Civil Aviation Ministry, the COPU said "having imposed the merger" of the two airlines, it "has shown little initiative in monitoring the progress" and its "failure" in not ensuring continuity of leadership.
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