The Minister for Civil Aviation, Mr Praful Patel, is to meet the employees of Air India and Indian here on Wednesday in an effort to smoothen the process of merger of the two airlines.

Late on Monday night, the Group of Ministers looking into the merger gave Mr Patel the mandate to speak with the employees to allay any fears they may have on the issue.

The Chairman and Managing Directors of the both airlines have already written to their employees on the benefits of the merger.

Some relief

While the Government has indicated that the merger would not lead to any staff retrenchment and could provide saving of several hundred crore for the merged entity, there have been apprehensions among employees about their future.

The merger process, however, is likely to get some relief in the forthcoming Budget. Sources indicated that income tax-related issues pertaining to the merger would be tackled by amending section 72 (A) of the Income-Tax Act, which is likely to be announced in the Union Budget. The provision deals with carry-forward and set-off of accumulated losses and unabsorbed depreciation in amalgamation or demerger cases.

Both Air India and Indian have accumulated losses on their balance sheets.

Earlier, the Committee of Secretaries that was asked to examine the merger proposal came out in favour of the process moving ahead.

The Government has committed to the merger process getting under way from April this year and being completed within the next 12-18 months.