Air India And Star Alliance Resume Membership Talks

A report from the Economic Times

suggests that Air India and Star Alliance have resumed membership talks. Now people who know me probably expect that I’m thrilled. I always fly Air India on domestic India flights, since they are the best carrier domestically. And I always fly Star Alliance internationally, so that I can avail of my status benefits. If Air India joins Star Alliance, I get those status benefits domestically, my Air India miles become more valuable, and my overall flying experience would be better. So it’s obvious that I should be thrilled about this news, right?

Well people who expect that I’m thrilled are wrong. I am not thrilled in the slightest. In fact, I am furious to hear this. Why? Because Star Alliance decided to play hardball and be downright insulting to Air India and the Government of India, and now it looks like they are going to get away with it. It seems that Air India and the Government of India are just willing to give up and let Star Alliance win. And I don’t like to see my country in this helpless state. I don’t like it at all.

To better understand the Air India/Star Alliance saga, we have to take a trip down memory lane. Star Alliance first announced that they had invited Air India to join back in 2007, almost 5 years ago. As a result of this invitation, many Star Alliance carriers, most notably Lufthansa, expanded Indian operations. More slots were issued to these carriers by the government of India. Bilaterals were improved. There was talk of the Government allowing Lufthansa to bring in the A380 to India once it was introduced to service. Star Alliance knew fully well that by bringing Air India into the fold, they would get preferential treatment in India. They decided that even with all the shortcomings of Air India, these benefits would be worth more to them.

Between 2007 and 2011, a number of delays to Air India’s entry happened. IT issues, general Indian bureaucracy issues, delays in the Air India/Indian Airlines merger, and other such issues delayed Air India’s entry into Star. It’s India – the concept of “on-time” doesn’t exist. This isn’t to excuse the poor form in which Air India was, but other Indian carriers haven’t exactly fared better. Kingfisher was suspended recently from joining oneworld as well.

It’s just the way things are.

As Air India’s entry got delayed more and more, Star Alliance became progressively more fed up. Star decided to get greedy and start courting Jet Airways as well as Air India. Obviously this didn’t fly with Air India or the Indian government. The advantages of alliance membership would be significantly diluted for Air India if another Indian full service carrier were also permitted to join the same alliance. The government of India also was concerned from a competition perspective of allowing 2/3 of the full service carriers to enter a single alliance.

However, by early 2011, Star Alliance was so fed up of the Air India delays that they issued an ultimatum – If AI didn’t fulfill all membership requirements by July 2011, they would be rejected from the alliance. Meanwhile, Star continued to try to get Jet Airways into Star Alliance as well. Early 2011 was a busy time for Air India. The government got them the funds required, and they showed the world that when called upon, Indians can actually get work done. The merger was completed, IT issues ironed out, and joining requirements were met by the deadline. A Star Alliance exec said something to the effect of, “I can’t believe that they actually managed to do it. They’ve probably gotten more done these past few months than the last few years.”

Air India was all ready to join Star Alliance by the deadline. They passed the compliance audit without a problem. And then Star Alliance decided to play hardball. They insisted that Air India and the Government of India agree to an agreement which would allow Jet Airways to also be inducted as a member soon after Air India had joined. Air India and the Government balked. However, Star Alliance backed down and didn’t make a big deal out of their decision.

Or so they thought. Imagine the shock that went through the government and Air India when Star Alliance announced that they had voted to suspend the application, mere days before Air India was preparing to finally join. People were furious. The CMD of Air India was sacked soon after, and not joining Star was one of the main reasons why that happened.

Now, it appears that Air India has gone back begging to Star Alliance to let them in, even if it means that Jet Airways gets let in too. And that’s why I’m not happy. Air India was in an excellent position – With Kingfisher going to oneworld and Jet Airways being courted by SkyTeam, they could have potentially locked Star Alliance out of the Indian market by not accepting Air India.

Air India should not bow to Star Alliance’s demands. After what happened, they are quite frankly insulting. I sincerely hope that some sense gets knocked into the airline before they agree to let Jet Airways in.