May 02--State-owned airline Air India Ltd, with a fleet of 123 aircraft, is all set to join Star Alliance, the world's biggest airline grouping, in July. Joining Star Alliance will allow Air India passengers to use Star's facilities such as airport lounges, fly on a network of 21,900 daily flights to 1,269 cities in 195 countries, and redeem air miles on 26 airlines such as Deutsche Lufthansa AG, Singapore Airlines Ltd, Air China Ltd, Air Canada, Turkish Airlines and Thai Airways. Star Alliance's chief executive officer (CEO) Mark Schwab, on a visit to India to review Air India's preparedness for joining the club, explains in an interview what will change on the ground for passengers. Edited excerpts --
Assume that I am an Air India flyer. What will change for me from July?
If you are a frequent flyer, if you are a silver or gold member of Air India's frequent flier programme, Flying Returns, you now have the world available to you to earn miles and to use your miles -- a very strong proposition. We fly to 1,269 cities around the world and it's a little hard to imagine what airport you might be going to that we can't get you there... (you will gain access to) more than 1,000 (airport) lounges around the world....for any customer in any given day, a one-stop check-in to the entire world. We very sincerely mean that.
If you start your journey in Chennai, come to Delhi, go to Munich, continue on to Lisbon, that journey could take you on three different airlines and four different stops. You are going to get all your boarding passes, your baggage tags (in Chennai) all the way to (your final) destination and you can be confident that it works all the way. Air India frequent flyers will see a strong proposition in Star Alliance. If you are the occasional user of Air India, it may be less obvious to you. In turn, the very comprehensive network of Air India within India is a strong attraction.
You are in Delhi to review the joining process...
The reason we are here in Delhi today is that we have been meeting on a regular basis with the leadership team of Air India to review week-by-week their progress and their integration in Star Alliance. The very good news is that excellent progress has been made. They have completed more than two-thirds of the requirements to have them join Star. We still have one-third of the things to complete, but we see a path to completion over the next few weeks -- end of May.
Our CEOs get together in London on the occasion of the new Star Alliance terminal at London Heathrow on 23 June where we expect an endorsement vote to be taken up on Air India joining Star. And we are just beginning to coordinate with Air India what is the best date for us to have them. I would expect sometime in the month of july.
What kind of challenges and opportunities are you working on?
All in all, part of the customer improvement plan that (Air India chairman) Rohit Nandan talked about is to help the management team to focus on areas of opportunity. They have in conjunction with the consultant -- Lufthansa Consulting -- put together a comprehensive plan to help them first determine where the gaps are and where the opportunities for improvement and timelines associated with them are so that they can have a very disciplined way of going about it.
What is the outer limit of the plan?
It's a relative chart. As other carriers get better, they have to get better themselves. Improving airport infrastructure changes dramatically the customer experience that helps not only them, but the rest (as well). Punctuality is a big driver of satisfaction...when one flies on time, the experience is better for the customer. It sounds unusual, but the food tastes better when the flight is on time. It has its overall impact. And the Air India fleet renewal, which they are going through, bringing new products, fresh new airplanes, is also being very well perceived... Improving in-flight systems is an opportunity...
Nearly 37 million international passengers travel to and from India a year. Air India and Jet Airways (India) Ltd have a 33% share of this international traffic, while 17% is with West Asian airlines such as Emirates, Qatar Airways, Etihad Airways and Air Arabia. Star Alliance has a 13% share of international traffic, while rivals OneWorld and SkyTeam have 8% each. What do you expect this relationship to do to your share?
So one and two together is very good. Air India and Star Alliance would be more than double then, more than 26%.
Tata Sons-Singapore Airlines will hopefully be running this year. Would Singapore Airlines, which is a Star member, not cannibalize Air India traffic?
It's not yet clear how fast and exactly what they look like... It's still a work in progress. And I know that Air India and Singapore Airlines have talked to each other, so it's a better question for Nandan.
Copyright 2014 - Mint, New Delhi