News: Air India may go with Star Alliance

(DNA 15/02/2007) Kolkata - There are strong indications that the national flagship carrier Air India will be joining the Star Alliance. The final round of talks between Star Alliance and Air India’s (AI) are slated to be held in Frankfurt in end-February, sources said. The merged entity of Air India and Indian Airlines (IA) will certainly be a part of the alliance. When contacted by DNA Money, Air India officials (AI) said: “Talks are still on. But Air India is seriously considering a membership with Star Alliance.” The long-standing free-flow code share agreement with German flagship carrier Lufthansa and US’ United Airlines tipped the scales in favour of Star, sources said. While it is difficult to quantify the growth in passenger numbers in the aftermath of the alliance but AI, it seems, expects at least a 10% increase in the first year itself. Reasoning why the carrier is opting for a global alliance at this juncture, an aviation analyst said: “First, there was the issue of the merger of AI and IA. Secondly, Air India is entering a new phase of growth with the addition of 68 aircraft to its fleet, which will occur over the next four years, up to December 2011. To be globally competitive, it is necessary to be part of an alliance team wherein you could plug into the benefits of the alliance partners in both directions.” There are many benefits that accrue from joining a global alliance, which include sharing of each other’s lounges at international airports and earn and burn frequent flyer points on each other’s network. Improved connectivity, seamless transfer of passengers at various points, sharing of resources at home base, a hub and spoke network at gateway points and a common IT platform are some of the other advantages. Star Alliance, set up in 1997, has 17 member airlines on its roster, carrying an annual passenger load of 413 million, serving 155 countries. But, according to the Centre for Asia Pacific Aviation (CAPA), the “Key for all alliances going forward is filling in the ‘white spots’”. Oneworld has just 4% capacity share within Asia and no coverage in the Middle East - gaps that will soon be plugged with the entry of Japan Airlines and Royal Jordanian within its fold. India seems to be becoming a battleground for global alliances. Jet Airways and Kingfisher Airlines both are rumoured to be weighing options. But Jet Airways officials strongly denied this. “We have no immediate plans,” a Jet Air official told DNA Money.