Air India and the Star Alliance [Pre-confirmation discussion]
 

The scene was almost surreal. To the great surprise of many observers, Star Alliance CEO Mark Schwab announced to his audience in a Vienna hotel that Air India had been accepted as a future member of the group. He pointed to the ballroom door to announce Chairman and Managing Director Rohit Nandan. Air India's chief should have walked into the room at that moment, according to the event's planners, but could not be found until some seemingly endless instants later.

To appreciate the irony of the situation, one has to revisit the history of Air India and the Star Alliance. The airline was first announced as a future member of the group in 2007. Back then, the state-owned carrier was in the midst of completing the merger with domestic carrier Indian Airlines and, combined with its famous inefficiencies as a government-owned entity rife with bureaucracy and political interference, simply proved unable to come close to meeting the many minimum requirements that Star wants future members to fulfill. In 2011, Star took the unusual step of shelving Air India's application which had missed many deadlines and did not look like it was going to meet the operational standards required.

The decision caused a huge political uproar in India and led to the Indian government questioning the legitimacy of some Star carriers' traffic rights into the country, as a means of retaliation and putting pressure on decision- makers within the alliance.

It is all the more ironic that the renewed Air India attempt to join Star was announced in Vienna—Austrian Airlines was among the targets of the Indian government and was at real risk of losing traffic rights to either New Delhi or Mumbai.

But it is not so much politics that has led Star's chief executive board to change its mind on Air India. Two factors influenced the decision, although it is also clear that another disappointment cannot be ruled out.

First, Star has observed performance criteria at Air India over several months and has noted improvements. On-time performance is up, and Star believes the international operation in particular is closer to the standards the alliance requires than in the past. Air India still has a lot of work to do to meet the minimum joining requirements, but senior alliance officials think it can get there within a reasonable time frame. It is doubtful that only a few months will be sufficient, as Nandan announced. Star should be happy if the airline is ready by 2015.

However, there is another, more strategic aspect: European airlines in particular have recognized that they need to act against the large carriers based in the Middle East. They have come to the conclusion that if they don't take action now, India, as one of the most promising emerging markets, will be lost. Etihad has bought a minority stake in Jet Airways, India's second big international airline. Emirates also puts a lot of its capacity into the Indian market. Both carriers and Qatar Airways are pulling a huge amount of long-haul traffic (including on routes to India) and channeling it through their hubs. Star carriers felt they needed a local presence to counter the threat.

Doubts are clearly justified that Air India is the right choice, but so far there are few alternatives. The question is whether Star could have waited longer. After all, its member Singapore Airlines is one of the shareholders of a new Indian legacy carrier that is to be launched next year—Tata SIA Airlines. But that carrier will need years to build up a presence large enough to be able to provide significant local feed. Star executives obviously believed they did not have the time to wait.

http://www.aviationweek.com/Article....p16-647355.xml

If I were a betting man, I would bet that the route to AI privatisation is the new Tata SIA airline... AI minus it's disgusting staff and disgusting bureaucratic mismanagement and pillage is an excellent buy for a professionally managed India based airline airline sans bilaterals, the flag, and govt business. Even more attractive if government writes off some debt ( and so do the tatas) and the disgusting staff are downsized.. Which is already happening... So, in five years, hopefully....

Looked at from this vantage what Star is doing makes sense. Betting on the only bet in a major country market.

i'm not so sure it would be an excellent buy....

Mainly for the bilaterals and the young fleet. But it's a big IF as the minuses I mentioned are major liabilities

Seems like de ja vu all over again. Let's see how it goes. It may also clear the deck for Jet Airways to join an alliance.

Jet Airway' star is now tied to Etihad. They will only join an alliance if EY does and that's not EYs strategy at this time

Why would anyone given a choice fly AI?

Two nights ago I flew Delhi to Muscat in business class.

Check in-- a very surly agent. The agent next to her picked up my passport while she was checking me in and started going page by page through my passport. Being nosey, wanted to see where I had been.

Start with the lounge. No internet access, no alcohol and disgusting food choices.

The flight, IFE not working. Food served in foil containers rather than put on proper plates. The lav was not stocked with paper towels so they put a roll of toilet paper on the counter. The crew was in a hurry to serve so they could sit down and do nothing. Never offered blankets. Cabin filthy.

And I could go on.

on short flights i have pretty much the same experience over & over again....on long haul their business product is pretty decent....

My favorite AI story is from a flight I took from Delhi to Shanghai. I was in Business class which was fairly full. The guy behind me (white foreigner) had passed out on his seat at 180 degrees. The stewardess did not even bother waking him prior to landing. He slept through the landing and wasn't bothered by his co-passenger also strangely! We landed with a thud, and that's when he woke up with a start alerting me and the other passengers. The look on his face - priceless! All's well that ends well I guess! :)

Well people who take AI from the USA is about the time savings.. a non stop flight.. why not.. leave @ 4pm from the NY area and be in Mumbai around 4 or 5pm.. I rather take that than UA or any other flight and get there @ or near midnight..

Politics works wonders, LH had no choice but to let a mediocre airline into the Alliance, I think even Ethiopian is better than AI. I have avoided AI at all costs, I guess in some cases, such as this, better to allow a lousy airline in when other Star members will benefit from getting greater market share!!!

Once AI completes accession i foresee we will see a marked increase in topics dealing with lounge access, either alone or with n family members, in the various * hubs, or the pitiful treatment of scores of passengers coming from deep Bharat and missing connections to US in FRA or MUC. That would be a mighty clash of unstoppable force (the argumentative Indian ;) ) against unmovable object (german ground and flight personnel and border control agents) :D

Does anyone feel that AI intl has improved over the past 2 years?

yes they have....but that's not saying much since they were so bad that the only way was up....once you are on the flight then its pretty decent....they have to improve their ground operations....

I must have missed this entrance of AI in Star A. Having suffered several times at the hands of whimsical AI staff on ground and in the air, have stopped even considering them.

When does full integration happen ? Redeeming USDM on AI ?