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IJRIME Volume2, Issue5 (May-2012) ISSN: 2249-1619

International Journal of Research in IT, Management and Engineering
www.gjmr.org 139



THE FALCON THAT DID NOT TOOK THE FLIGHT; A CONCEPTUAL

RESEARCH PAPER ABOUT THE FALLOUT OF THE AIR INDIA AND

INDIAN AIRLINES MERGER FROM THE HR PERSPECTIVE.

Dr. Mrs. Naaz Ovais*

Ms. Durdana Sohail**



ABSTRACT

At the time when most of its competitors are performing low, new customers are flowing in, and

the recent kingfisher saga it’s the time when a strategy could be worked out to fully integrate the

two entities, Air India and Indian Airlines and capitalize upon the opportunity. The merger

aimed at forming a big corporation by merging the two companies. It would not be wrong to say

that the two companies or two big birds came together to form one bigger organization or a

falcon. But unfortunately this falcon reared to fly high in the skies could not take its flight. It is

usually seen that during the M&A the main focus is on getting the deal done, but the issues that

ensure that the deal works are quite often neglected. Without the wholehearted support of the

employee no merger or acquisition can be successful. The focus on the integration aspect is still

missing somehow. The financial and operational parts were well looked into but the deeper

issues of human resource were not handled properly. This research paper is an effort to bring

into light the HR issues concerned with the merger of the two airlines, Air India and Indian

Airlines.

Key Words: Air India, Indian Airlines, Merger, HR Issues.















*P.G Department of Economics, Safia Arts and Commerce College, Bhopal, MP

**Assistant professor, Allana Institute of Management Sciences, Pune, Maharashtra

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IJRIME Volume2, Issue5 (May-2012) ISSN: 2249-1619

International Journal of Research in IT, Management and Engineering
www.gjmr.org 140



INTRODUCTION

In these fast changing times the companies have found out a new way to grow inorganically

through Mergers and Acquisitions. With the growing competitive pressure organizations are

finding it difficult to solely grow from internal development and wait for the long gestation

period involved thereby. In such a scenario, the best option left with, is Mergers and Acquisitions

(M&A). But at times, the corporate rationale is unable to look at the critical success factor

behind these M&A. These are the factors that should be put in the forefront of consideration, for

the successful completion of the M&A story. These issues do not mainly relate to the financial or

the economic aspect of the new organization, but deal with the very basic issues of low morale,

insecurity, a sense of invasion, the general chaos, etc which ultimately results in disorientation

due to frustration, which in turn results in poor performance and low productivity. In short the

HR aspect is neglected. The executives involved in the M&A process often tend to overlook the

human aspect involved. This research paper deals with the human side of the merger of Air India

and Indian Airlines, which started in 2007 and was finally completed in 2011. And the issues

resulting in the fallout of the merger.

With the recent news on the CNN- IBN of the Civil Aviation minister calling it as a big mistake,

it becomes all the more important to look into the reason of its fallout.

Before the merger the two companies were big players in the air, one in the domestic sector and

another in the Indian international sector. The merger aimed at forming a big corporation by

merging the two companies. It would not be wrong to say that the two companies or two big

birds came together to form one bigger organization or a falcon. But unfortunately this falcon

reared to fly high in the skies could not take its flight. It is usually seen that during the M&A the

main focus is on getting the deal done, but the issues that ensure that the deal works are quite

often neglected. Without the wholehearted support of the employee no merger or acquisition can

be successful. The focus on the integration aspect is still missing somehow. The financial and

operational parts were well looked into but the deeper issues of human resource were not

handled properly.

People are important, in fact they are the most critical assets and more so in the service sector

where they can become the core competency for any organization. In such a scenario how can an

organization keep its HR issues at bay and think it can still make profit. A news paper recently

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IJRIME Volume2, Issue5 (May-2012) ISSN: 2249-1619

International Journal of Research in IT, Management and Engineering
www.gjmr.org 150



Figure 2



Centre for Asia Pacific Aviation report 2009

Figure 3



Centre for Asia Pacific Aviation report 2009

Page 21

IJRIME Volume2, Issue5 (May-2012) ISSN: 2249-1619

International Journal of Research in IT, Management and Engineering
www.gjmr.org 159



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IJRIME Volume2, Issue5 (May-2012) ISSN: 2249-1619

International Journal of Research in IT, Management and Engineering
www.gjmr.org 160



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