The key to Air India's turnaround plan and improving the loss-making national carrier's cashflows has just collapsed. Star Alliance, a global airline network, suspended Air India's pending entry into the global pact of 27 airlines after the carrier failed to meet the minimum conditions, according to a press release from Star Alliance.
"Air India has not met the minimum joining conditions that were contractually agreed in December 2007," Star Alliance said in a statement on Sunday.
Air India was given a deadline of 31 July to meet all standards and criteria to join the Star Alliance network. Yesterday the group's board voted to disapprove the induction of the ailing national carrier.
The Star Alliance network, which allows passengers to accrue frequent flier miles from all member airlines around the world, would have helped the bleeding airline to increase its revenues considerably and also add depth to its route network in the international sector by providing passengers last mile connectivity in foreign countries.
The network has about 80 different conditions that new airline members need to meet, from computer integration to safety standards.
Air India's application was reviewed collectively by the Indian Ministry for Civil Aviation, Star Alliance CEO, Jaan Albrecht and the Air India CMD, Arvind Jadhav. During the review meeting all three parties decided to suspend Air India's pending membership.
Star Alliance CEO, Jaan Albrecht said: "With the collective decision to put the integration efforts on hold today we aim to contribute to Air India's flexibility to concentrate on its ongoing strategic reorientation. In this process our member carriers will continue to provide assistance to Air India wherever required."
Existing bilateral relationships with Star Alliance member airlines are not affected by this decision.
Formed in 1997, Star Alliance is a consortium of 27 airlines, including Lufthansa, Air Canada, Singapore Airlines, Thai Airways and Swiss. Together, its members have more than 4,000 aircraft and serve 1,160 airports in 181 countries.
Updated Date: Dec 20, 2014 04:07:13 IST