Naresh Goyal promoted Jet airways has reason to cheer as the civil aviation ministry might give them permission to join Star Alliance simultaneously with state owned Air India. Prior to this, the government wanted the Star Alliance, comprising 27 airlines across the globe, to decide positively on Air India’s membership first.
Last year, Star Alliance had snubbed Air India. Despite the process of admission being in the final stages, the airline’s membership was put on hold because it did not meet certain conditions and all members of Star Alliance had not approved of Air India’s entry.
About Jet’s entry in Star Alliance, Ajit Singh, civil aviation minister, said in an interview with Business Standard, “We may consider about Jet’s entry in Star Alliance simultaneously with Air India. We will also be working on Air India’s entry in Star Alliance.”
Aviation experts believe that for AI’s entry in Star Alliance, the government can arm-twist German carrier, Lufthansa, one of the founding members of Star Alliance.
The Civil Aviation ministry has also indicated at times that a lot of favours were doled out by the government to Lufthansa. In Economic Editor’s conference held in September, Singh said “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”.
Adding to this, a senior ministry official told Business Standard, "Swiss and Austrian Airlines, Lufthansa partner airlines,which had earlier been acquired by Lufthansa, continue to function under bilateral agreements signed between India and the two respective countries. Lufthansa has not given the ownership figures for one of these airlines to the government.”
Lufthansa, the mentor airlines in Star Alliance for Air India, has maintained that more than one airline from a country can become a member of the Alliance, as was the case with airlines from China, Africa and Brazil.
Air India had earlier opposed Jet Airways’ proposed entry into the Alliance, alleging Lufthansa did not favour the state-owned airline, which the German airline denied.
An aviation analyst said, “If Jet Airways becomes a member of Star Alliance before Air India, it is likely to negatively impact the market share of Air India on international routes.”
Air India and Jet airways are already neck and neck in the international skies. Air India and Jet airways had 15.80% and 14.30% market share respectively in first quarter of 2012-13.
Before Air India’s application was put on hold, it had paid €10 million (about Rs 69 crore) since May 2008 to Star Alliance, as part of the joining fee.
Star Alliance is the largest of the three airline Alliances of the world, the other two being SkyTeam and Oneworld. Star Alliance includes Deutsche Lufthansa AG, Air Canada, Singapore Airlines and Thai Airways International PCL. A membership in the group ensures shared benefits to members and seamless travel to passengers. Facilities for Star Alliance member airlines are located close to each other at airports. Common airport facilities, coordinated schedules and a range of new technologies are also available to member airlines.