Monday, February 20 2006 14:17 Hrs (IST) - World Time -

Singapore: State-owned carriers Air India and Indian Airlines may be merged after their initial public offerings are completed, Minister for Civil Aviation Praful Patel said today (Feb 20 2006).

A merger could help raise the competitiveness of the airlines against privately owned carriers, Patel told sources on the sidelines of an aviation conference in Singapore.

"We are looking into synergising the operations of Air India and Indian Airlines to make them stronger carriers, but we haven't decided on the structure (of a merged carrier)."

A final decision on the merger will be made later this year, the minister said.

Patel said Air India will delay its planned IPO by at least two months as the final details of the offer are still being negotiated.

"Air India's IPO has been delayed. We now expect that (both) IPOs will be brought out to investors by May," Patel said. "We are looking at about 20 per cent to 25 per cent public ownership of the companies."

Financial details are still being worked out between the airlines and their advisers, and Patel said he expects substantial progress to be made in the negotiations in coming weeks.

Air India Chairman V Thulasidas had previously said the airline would launch its initial public offering by March, the end of the carrier's financial year.

Patel expects the 25 per cent annual growth rate in India's aviation sector to be maintained over the next five years.