The common board of the two state-run airlines, which met in the capital, was scheduled to discuss the formation of a holding company of the two air carriers. The holding company is to be a precursor to a joint balance sheet and eventual merger of the airlines.

However, the discussion was postponed. The structure of the holding company will now be discussed at a board meeting in the first week of December. ``Some of the board members were absent at the meeting. So when the full board is able to meet in December, the merger of the airlines will be taken-up for the discussion,'' said an IA official.

A report prepared by leading international consultants A F Ferguson on the structure of the holding companywill be presented to the board.

IA and AI have failed to see eye-to-eye on the merger in the past and it continues to be a pipe dream. IA's main objection to a merger with AI is the the growing loss of the latter airline.

The top brass of IA feels that merger with a loss-making airline will not help IA's fortunes at this point of time. IA emerged from the red in 1997-98, recording a Rs 47 crore net profit, but fell to make a Rs 34 crore loss in the first six months of the current fiscal.

The airline has scaled-down its profit projection of Rs 90 crore in 1998-99, but still hopes to make a net profit between Rs 40-Rs 50 crore.

Air India, on the other hand, has recorded a net loss of Rs 107 crore in the first five months of the current financial year. Both IA and AI have asked for a financial bail-out package from the Government. Interestingly, the staffs of IA and AI is also not conducive to the proposed merger with employees of the two airlines afraid of losing their benefits in the eventuality of amerger.

A balance-sheet of IA for 1997-98 was submitted to the board of directors on Friday. The board also reconstituted the board of directors of Alliance Air, a fully owned subsidiary of IA.