Move over Jet-Etihad, Air India to get Star Alliance edge

New Delhi: So this is Air India’s resounding reply to the game changer deal between Jet Airways and Etihad Airways. The national carrier today announced that it is once preparing to join Star Alliance, the most prestigious airline grouping in the world. This means it can now use the wide Star Alliance network, which includes successful airlines such as Singapore Airlines, Lufthansa, THAI and Turkish Airlines as its members, for enhancing overseas operations. In a big way. In fact, if Air India manages to integrate itself with the Alliance in a short span of time, it may also be able to counter stiff competition otherwise coming its way from the Tata-Singapore Airlines alliance. Any which way ones looks at it, the Star Alliance entry can only be good news for Air India.

“In a major decision in Vienna today, Star Alliance has unanimously decided to lift the earlier suspension of the process for Air India entry into the alliance. With this decision, final process for eventual entry of AI has begun,” Air India said in a statement.

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So what exactly will Star Alliance bring to the table? Now, instead of looking for a flight into the Gulf with either Emirates or Jet-Etihad, a passenger wanting to fly international from almost any city in India gets seamless transfers on a single boarding card in some cases. The passenger can book flights to the final destination at one time and hop on to a flight operated by a Star Alliance member anywhere on the route. So even if AI does not directly to fly to a destination, it can now offer flights to that destination on the strength of this alliance.

Besides, an entry into Star Alliance means more frequent flyer mileage points, code sharing leading to a wider choice of flights and access to facilities at over 1000 lounges worldwide for AI passengers. The Star Alliance network offers 21,900 daily flights to 1328 airports in 195 countries.

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According to the airline’s own estimates some years back, it lost out on about Rs 400 crore annual revenue because of its inability to enter the Star Alliance in its first attempt. Not only loss of potential revenue, AI also could not recoup investments made in the preparations for joining - new boarding cards with Star Alliance logo had been printed by July 2011 and then had to be shredded. In the absence of Alliance’s network benefits, AI has been making efforts to forge individual commercial code share agreements in select markets with individual airlines till now.

AI’s entry into Star Alliance not only bodes well for its future revenues but also shows how consistent and sometimes ugly pressure tactics used by the Indian government against German flag carrier Lufthansa-which was mentoring AI earlier for its Allince entry-have worked. The entry this time has probably come about on the back of pressure which the Indian government exerted consistently, once even threatening to cancel the permits of two Lufthansa Group airlines-SWISS and Austrian-for Indian operations.

Last year, Civil Aviation Minister Ajit Singh had made it clear that a “lot of facilities have been given to Lufthansa to get AI into Star Alliance, we almost made India an open-sky (operation) for them. Now, we will ask them to facilitate AI’s entry into Star Alliance”. He had alleged that “benefits and rights” were given to the German carrier and Lufthansa needed to reciprocate by helping AI enter Star Alliance.

Air India was to join Star Alliance in 2011, but was denied entry when several Alliance members opposed such a move. Unconfirmed reports had suggested then that the Alliance was keen on taking Jet Airways and had pushed the Civil Aviation Ministry for permission to also take Jet in its fold.