The Parliamentary Committee's suggestions are bound to cause embarrassment to the Government as the Ministry of Civil Aviation is against the merger and in December had sacked the entire board of directors of the airlines for going ahead on the issue without consulting the ministry. The former IA managing director P C Sen was also removed from his post.

The board had accepted the A F Ferguson report on the phased merger of the two state-run airlines. Union minister for civil aviation Ananth Kumar had stated at that time that a merger would delay the proposed Government disinvestment in IA and AI. The ministry later set-up committees to ensure co-operation between the airlines in specific areas.

Interestingly, the 45-member Parliamentary Committee is headed by Vijay KumarMalhotra who belongs to the ruling Bhartiya Janata Party (BJP). Its other members include Jayanthi Natarajan, former minister of state for civil aviation, Janardhan Poojary and P C Chako of the Congress and Omar Abdullah of the National Conference.

In another major recommendation, the committee has said that Air India should purchase and fly separate aircraft for VVIP flights so that regular flight schedules do not get interrupted. The committee found that the Government owes the flag carrier Rs 8.76 crore for operation of VVIP charter flights.

For restoring the financial health of Air India, the Parliamentary committee has recommended that equity base of the airline should be widened so that the airline can build-up debt. It has suggested that the Kelkar committee report on Air India's restructuring should be completed at the earliest as every single day of delay in restructuring AI is costing Rs 1 crore to the national exchequer.

To reduce the excess manpower in AI, a complete ban on fresh recruitmentinAI has been recommended. All surplus staff should be recalled from foreign stations and utilised in the engineering or catering department.

The committee has also called for an early decision on purchase of new aircraft by AI, besides suggesting that any surplus funds that the airline earns in the future be ploughed back in creating of assets.

AI should also cut-down flying on uneconomical routes and should concentrate on flying cargo on routes with low passenger loads.

The committee has suggested that the airline should appoint general sales agents (GSAs)wherever necessary. A strict check should be kept on them, however, to check any malpractices.

Suggestions made by Parliamentary Standing Committee on Transport and Tourism: