You’ve guessed it – It’s AIR INDIA, who has got an invite into Star Alliance, to recommence the integration of the carrier that was halted in 2011.
Mark Schwab, Star Alliance CEO states
“Today we see an Air India which has successfully completed its merger with Indian Airlines and is building up a new fleet that forms the basis for a much improved level of service. This is why we believe the time is now right to recommence the integration process”
Star Alliance suspend Air India’s progress to join Star Alliance in July 2011 on the grounds that the airline had not met conditions to join it. This is on the back of the original decision for Air India to join in 2007.
However, Air India itself was distracted with the merger of Indian Airlines and AI itself. Combine that with the requirements of joining an alliance, and things get messy fast. In addition, there has been upheaval in the Indian air market with low cost carriers joining the game, as the rise and spectacular fall Kingfisher Airlines.
The integration process is likely to take three months – although lets face it, if it took Air India 4 years to get not very far, it could take a year or so to try and get further. This will involve codeshares, network integration, ticket system and of course – frequent flyer benefits such as status, lounge access and miles.
Air India has been improving its performance, with revenue rising, load factors increasing.
Is this the right decision for Star to attempt to integrate Air India again? I’m honestly not sure. The upside is that no one alliance has a major foothold in India (with the exception of Jet Airways, which has an equity stake by Etihad… and Etihad refuses to call what it’s doing an alliance, even though it tastes and looks like one), so the first alliance in will have rich pickings.
Still, there is a risk – as Star Alliance has experienced before. Will it stick, and will Air India actually get to the point where they are formally a member of the alliance.
That’s the big question to be answered.
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It seems to me that Star has to pull something big out of the bag, and quickly. OneWorld and even SkyTeam are improving in leaps and bounds, but Star seems to be developing leakages and cracks – LH pulling its premium inventory, SQ getting even less keen on the whole idea, UA adding restrictions through PQDs on flying partners etc. – not to mention losing TAM and US Airways.
So gaining a foothold in India is massive for them.
In a idealistic situation, I feel AirIndia should’ve changed their decision and joined OneWorld and the upcoming Tata Singapore Airlines would’ve been apt for Star Alliance.