The move towards more structural change comes several years after a joint board was set up in order to achieve much the same things as the new holding company is intended to, namely, strategic alliances and preparation to meet market competition. As impressive as all this undoubtedly sounds, it is a step in an indeterminate direction. The holding company structure may or may not lead to merger. If the ambivalence about the ultimate objectives has any purpose, it is surely not to confuse the airlines' management itself.

After all these years with the writing writ large on the wall, it might havebeen supposed that a restructuring plan would emerge fully fashioned out of the depths of Air India and Indian Airlines. With accumulating losses, aging fleets, rising costs, overmanning and tougher competition to face at home and abroad, they certainly do not have the luxury of time to try first this option and then that. But in the vacuum that is government policy, long-term planning is impossible. As far as is known, the process of disinvestment, if it goes as planned, would leave the government eventually with a minority stake in both airlines. But it is anyone's guess when the process will start and how long it will take.

In the interim, the holding company is supposed to be in place to oversee disinvestment, the functioning of the two carriers and perhaps to lay the ground for merger. Where the existing joint board fits into the puzzle is unclear as is the form and extent of the holding company's stake in the airlines. Without greater clarity on ends and means, Air India and Indian Airlines look likehaving to suffer a lopsided, top-heavy structure and can forget about streamlining the present one.

Merger makes a lot of sense and has done so for years. The sooner policy-makers get to grips with what is inevitable, the sooner they will be able to start dealing with the many obstacles in the way and especially those presented by vested interests. No one does so well out of the present arrangement as those whose performance is not up to scratch or with little empires to protect. But merger for merger's sake achieves nothing.

In order for merger to lead to greater operational efficiency and higher profitability, the fat must be trimmed, establishment costs reduced drastically and manpower deployed more rationally. Even all that would not be enough to make a difference without sound marketing strategies. As things stand today, where Air India and Indian Airlines are not actually losing ground to the competition they wage a hard battle merely to hold on to their sectors. It is high time major changes weremade.