April 20, 2024

Air India Faces Hurdles in Joining Alliance

NEW DELHI — Air India, the troubled state-owned airline, risks being rejected by the Star Alliance network of airlines because of delays in fulfilling membership conditions, an executive from Star Alliance said Monday, putting in jeopardy a key element of its turnaround plan.

“We have indicated to Air India that they will have to be ready to join, by latest, end of July,” said Markus Ruediger, media relations director at Star Alliance. There are “items outstanding” on a list of about 80 requirements, he said.

He did not elaborate about what Air India still needed to do, but he said Star Alliance had already made it clear that Air India had been given extensions and had taken longer then expected to fulfill the requirements. It is “not in their interest to delay any further,” he said.

Star Alliance first invited Air India to join the group of 27 airlines, which includes Air China, Singapore Airlines and United Airlines, in December 2007. The company said in March 2007 that it would merge with Indian Airlines, the state-run domestic carrier.

Air India is hemorrhaging money and lost about $1 billion in its most recent accounting year. Customers, driven away by frequent strikes and delays, are shifting to more modern and efficient private carriers in India.

Air India executives have said in recent months that joining the Star Alliance is a main part of the airline’s turnaround plan. Frequent travelers often book flights based on whether an airline is part of their global network, which earns them frequent flyer miles when they travel.

Membership in the Star Alliance could increase Air India’s revenue 9 percent to 15 percent, a company executive told The Hindu, an Indian newspaper, in an article published Sunday.

“We are talking to them and it is between us and them,” an Air India spokesman, Kamaljeet Rattan, said Monday when asked about the Star Alliance membership. “We would not like to go public about it.”

Air India is far behind rival airlines in some respects. For instance, the airline still does not use computers to make schedules for its 1,600 pilots, relying instead on pencil and eraser in a ledger.

Star Alliance has often said that the Indian market is large enough that it could invite two airlines to be members. Star Alliance’s major rival, Oneworld, is aligned with Kingfisher Airlines in India.

“We do understand that Air India has undergone a merger, implemented a new I.T. system and has also tried to cope with a massive fleet renewal at the same time as the industry went into a downturn,” Mr. Ruediger said. “We made it very clear that we expect them to meet all the requirements by the end of July, bearing in mind that on average integration takes around 18 months.”

A team of executives from Star Alliance and from Air India’s mentor airline, Lufthansa, are working with Air India to help the Indian carrier meet the requirements, Mr. Ruediger said. “Clearly, the onus is on Air India to get the items achieved by the end of July.”

Article source: http://feeds.nytimes.com/click.phdo?i=b8da2dac965af9e96f8a69f492da8417

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