At a meeting held in Mumbai on Tuesday, Patel reiterated that the pending wage revision of Indian Airlines employees would be resolved prior to the merger.
Representatives of Indian Airlines' largest union Air Corporation Employees Union were present while Civil Aviation Secretary Ashok Chawla and Indian Airlines Chairman and Managing Director Viswapathi Trivedi represented government and management along with the minister.
Speaking to Business Standard, ACEU General Secretary J K Badola said, "Union Civil Aviation Minister has assured us that the wage revision would be settled prior to the merger of Air-India and Indian Airlines."
The wage revision was pending since January 1, 1997. Sources said ACEU had the first round of wage revision discussion with Indian Airlines management on 13 and 14 February, that ended inconclusive. The total membership base of ACEU is over 14,000 while total strength of Indian Airlines is 18,000.
Badola said, "The minister has categorically assured that the government will be looking into the matters including seniority, promotions, salary and other career related developments in line with Air-India. The minister reiterated that no body will be losing seniority or promotions."
"We have requested the government to keep the domestic operations portfolio under Indian Airlines after the merger. We have also submitted our detailed demands to them," he added.
He denied that ACEU has any plans to launch nationwide strike as government has assured wage revision before the merger. He was reacting to the rumours spread after former ACEU general secretary Arun Kumar saying that Indian Airlines stagg may resort to strike on March 25.
ACEU President Dinakar K Shetty said the merger process should start from March 31 and would take 18 to 24 months thereafter.
"Government has constituted a committee consisting representatives of Indian Airlines, government and ACEU to expedite the implementation of wage revision that was pending for last 10 years," Shetty said.
Asked about the merger process, Shetty added, "We are neither welcoming the merger not opposing it. For that matter any merger could be smooth only if the employees are kept happy. If they are not happy, then protest will be the only way in front of them."
Consultant majors Accenture and Ambit Corporate Finance are advising the government on merger proposals of the two airlines.
Civil Aviation Minister Praful Patel had earlier said that the merger would involve no retrenchment, no cuts or losses in pay scale, perks or allowances.
Besides human resources integration, the merged airline, is expected that the combined airliner would have the benefit of increased cost savings and profitability of Rs 820 crore by 2010.
Out of this Rs 810 crore, Rs 410 crore would come from revenue synergies, primarily driven by network integration and Rs 410 crore from cost and capital synergies driven by consolidation and better negotiating power as against integration cost of Rs 200 crore, some of which will be one-time cost.
Hence, the merger is expected to enhance the profitability by over Rs 600 crore per annum (i.e. 4 per cent of current combined revenue).