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Into the Bigger League:Maharaja Joins Star Alliance
The Indian aviation scene has seen a real turn around and that’s on negative aspect mainly. In the last few years most air operators have recorded loss and sharp decline in passenger flow. The government-run carrier Air India has been no exception.
But lately, the Maharaja (Air India) has taken a quantum leap in trying to regain its lost market. On July 11, Air India formally became the 27th member of Star Alliance, opening up its domestic network in the fifth largest aviation market to the global airlines grouping’s passengers the world over.
Seen as a role model for the civil aviation industry, Star Alliance was founded in 1997 with the aim of offering worldwide reach, recognition and seamless service to the international traveler. “By working together closely in Star Alliance, its member airlines including Air India are now able to create and enhance products and services which cater to the needs of international travelers,” says a senior official in the Union Aviation Ministry.
Others are equally enthusiastic about the same. “In India, Air India becomes the first global airlines alliance member. The immediate benefit for Air India will be an enlargement of its customer network. There will be an increase in the inflow of passengers traveling in our alliance network to participate in India’s expanding economic activities and tourist destinations,” says Mark Schwab, Chief Executive Officer of Star Alliance Services, who was recently in New Delhi.
In concrete sense, Air India would add about 400 daily flights and over 40 new destinations in India to the 27-member Alliance network. As it is, the Alliance has over 18,500 daily flights and touches as many as 1316 airports dotted across 195 countries.
With Air India joining it, the Alliance’s market share in India grows to about 30 per cent. This would immediately “pose a challenge” to some rivals especially to Gulf carriers in particular which take away a considerable number of Indian passengers to Europe and North America.
Experts also see other benefits. Firstly, as part of the global network, Air India will see more fliers coming in. Moreover, working in partnership with Star Alliance will also mean a significant reduction in passenger handling costs both domestically and at other overseas destinations. “This was a well thought out strategy. The working cooperation with member alliance partners would facilitate a constant updating in the passenger service provision standards and learning the best practices,” says Mark Schwab.
The Air India’s top brass too cannot agree more. Air India’s CMD Rohit Nandan says, “by this alliance, we open up a completely different world for our passengers, who can now travel to over 1,300 destinations right across the network and enjoy world-class service, better connectivity and seamless travel wherever they go.”
Among the 27 members of the alliance are Air Canada, Air China, ANA, Lufthansa, South African Airways, SWISS, Singapore Airlines, Turkish Airlines, Thai and United. As part of the agreement, sources say, some Air India flights would be included in the Star Alliance Circle Pacific Fare which allows circular round-trips covering the Asian countries bordering the Pacific, the main international hub airports on the Pacific Coast of Canada and the USA, as well as the South Pacific, mainly Australia and New Zealand.
Globally, passengers further benefit from a wider choice on routes connecting North America,Europe, Asia and Australia via the Indian Subcontinent, they say.
“NO PRIVATIZATION MOVE FOR AIR INDIA”
Amid these innovative commercial-oriented strategies, Air India is also facing question on whether the major carrier could be privatized. This question figured in Rajya Sabha during the budget session of parliament. However, the government ruled out any privatisation move for Air India. “No such proposal is under consideration of the government at present,” Minister of State for Civil Aviation GM Siddeshwara said in the Upper House of Parliament. On whether the government would conduct a comprehensive study to strengthen Air India’s financial position, he said the government had approved the turnaround and financial restructuring plans in 2012. “Since then, Air India has shown improvement in its financial parameters ... and therefore, no further study is envisaged at this stage,” he said. The post-tax losses suffered by the national carrier had come down from Rs 7,560 crore in 2011-12 and Rs 5,490 crore in 2012-13 to Rs 5,389 crore in 2013-14. Its operating loss was also on the decline from Rs 5,141 crore in 2011-12 and Rs 3,807 crore in 2012-13 to Rs 2,124 crore in 2013-14, he said.
Significantly, after joining Star Alliance, Air India’s passenger revenue is expected to rise by 3-5 per cent as a result of cross-feed to and from the partner airlines of this global airlines’ grouping.
The passenger can get a marked improvement in customer relations and air travel experience. Even domestic travellers can get Star Alliance Frequent Flier points and look forward to availing such benefits on other airlines. The Air India traveller will also enjoy the benefit of easier and faster passenger check-ins and baggage handling. The alliance will also assure seamless travel for Air India’s international passengers. That is the most significant aspect.
Mark Schwab, CEO,
Star Alliance
“Air India worked hard to meet the exact expectations prior to joining and today we are elated to be inducted into the Star Alliance family”
Rohit Nandan,
Air India Chairman cum MD
REAL BENEFITS:
1.Passengers would benefit from a wider choice on routes connecting North America, Europe, Asia and Australia via the Indian Subcontinent.
2.Air India will see more fliers coming in.
3.It also mean a significant reduction
in passenger handling costs both domestically and other overseas destinations.
4.The Star Alliance would ensure that all partner airlines provide better travel facilities. The tie-up also brings in constant improvement in service norms and provision.
5.Working together with Star Alliance and other member airlines will also provide Air India with a chance to make higher income earning from 3 to 8 per cent.
