Kumar, who was in Ahmedabad on Sunday, told a private TV channel that a joint board would have been a stumbling block for the disinvestment process. "The government in its best wisdom has taken the decision. The holding company would not have served our purpose," he said, making obvious his opposition to the airline board's recent decision on the concept of a holding company as suggested by consultants AF Ferguson. In fact, no government nominee was present at the board meeting in Delhi on December 7 when the issue of a holding company concept followed by a merger three years later was discussed and approved.

On the proposed merger between the two airlines, the minister said his priority was to bring about a "synergy" betweenthe two airlines to achieve the disinvestment target. The synergy would help in removing competition between them in certain sectors, the minister said.

The Disinvestment Commission has recommended a partial divestment of Air-India followed by the government's decision to restructure Indian Airlines and reduce its stake to 49 per cent in three years.

"A merger would mean that the Disinvestment Commission would have to look at the whole process afresh," ministry sources said.

Ministry officials said the creation of the separate boards was a step towards expediting the disinvestment process which was on the top of the agenda of the new boards of the two airlines.

While Rs 125 crore of government equity was likely to be infused in Indian Airlines as part of the turnaround steps recommended by the Kelkar committee, a similar funding was likely for AI too in the next year, the ministry officials said.

According to sources, some more names for the separate boards for the two airlines are likely to beannounced by the government on Monday. The tenure of the earlier common board, which had three government nominees, was to expire in March 2000, and P C Sen, chairman of the joint board was to step down in February next year.

The civil aviation ministry, sources said, was also against the fare hike by IA in October to meet the increased input costs as well partly offset the losses.

The fare hike and the slowdown of economy had a disastrous effect as the much awaited traffic had not picked up and Indian Airlines has only ended up in a loss during the first six months of this financial year.

The airline had earlier envisaged a profit of Rs 100 crore but scaled the figure down to Rs 45-50 crore for 1998-99. On its part, Air India has estimated a loss of Rs 340.72 crore in the current financial year.

This was the fifth occasion during the past 10 years that chief executives of Indian Airlines had been given sudden marching orders. R Prasad, Air Marshal S S Ramdas, L Vasudev and Brijesh Kumar were giventhe marching orders before the expiry of their term.

In the past, Air India founder and aviation pioneer J R D Tata, Air Marshal P C Lal, who was appointed the first chairman of both the airlines, and managing directors Capt D S Mathur and Brijesh Kumar had also met similar fate.