The board took this decision at a meeting in the capital on Monday when it accepted a three-year time frame for the merger recommended by AF Ferguson & Co. The Ferguson report suggested setting-up a two-tier structure, with a holding company and joint management group, for the merger. This decision put the board on a collision course with Kumar who, in a completely opposite stance, stated in parliament that the airlines will not be merged, said top ministry sources.

The minister had earlier also expressed his reservations on the proposed merger of the two state-run carriers. The board members felt that the minister'sdispleasure could be conveyed to the board through the government representatives. "The board discussed the AF Ferguson report in detail on Monday. A decision was taken to accept the three-year time frame for the merger. However, every decision of the board is confirmed at the next meeting as some of the members may be absent," said a member of the erstwhile board of directors.