Friday, November 18 2005 14:09 Hrs (IST) - World Time -

New Delhi: Public sector carriers Air India and Indian Airlines would not offload more than 20 per cent of their equity in their proposed Initial Public Offer (IPO) slated to be announced within this fiscal.

"Not more than 20 per cent of equity will be offered in these two carriers. Their public sector status will be maintained," Civil Aviation Minister Praful Patel said at the Economic Editors Conference here.

The two airlines would go to the capital market 'in the first quarter of 2006', he said, adding that the employees would also be given stock options.

Patel said the two airlines "need more financial muscle and more equity. We cannot just do with the equity injected by the government if they have to face heightened competition."

In a wide-ranging address, he said AI and IA would also require greater synergy in their operations while referring to the recent mergers in the global aviation industry, like KLM being taken over by Air France.

"Even in the domestic aviation scene, consolidation talks are on among some airlines," he said while stressing on the need for the public sector carriers to synergise their operations.

The Minister said AI's fleet acquisition plan for 50 Boeing aircraft and another 18 for its subsidiary AI Express would get the final nod of the Cabinet Commitee on Economic Affairs by the middle of December and a note for the CCEA was already in circulation.

Observing that IA's plan for purchase of 43 Airbus aircraft had already been cleared, Patel said the first of the A-319s would arrive this month-end followed two each in December, January and February.

He said the Airports Authority of India (AAI) would also raise about Rs 6,000 crore and undertake upgrade and modernisation of 35 non-metro airports across the country "in one go".

The work on these airports would begin by 2006-07 and end by 2008-09, Patel said, adding discussions were on with the Planning Commission about the ways in which resources could be mobilised for this purpose.