Air India To Expand Local, European Network

July 12--NEW DELHI -- State-owned Air India Ltd , which formally joined the global airline network Star Alliance on Friday, will expand its domestic route network as well as its European presence over the next one year, chairman Rohit Nandan said.

"We plan to balance our network 50:50. Currently our network is 61:39, where 61% is international," Nandan said in an interview after a ceremony at Delhi's Indira Gandhi International Airport where Air India was inducted into the airline club.

Air India has launched a network analysis for flights to countries such as Spain, the Netherlands and Denmark. The airline plans to offer return flights on the Delhi-Madrid-Barcelona, and Delhi-Amsterdam-Copenhagen routes.

"We are studying these routes," Nandan said.

The airline has already launched similar flights from Delhi to Rome and Milan this year and connected Moscow after many decades.

Star Alliance's chief executive officer Mark Schwab said airlines in the alliance typically fly into the hubs of member airlines and he hoped Air India will also fly into these hubs, even though it is a commercial decision.

"We know that the 'new' Air India is looking forward to providing the Star Alliance customer benefits to many more travellers," Schwab said.

Passengers of Air India will be offered benefits, including redeeming miles on any of the over two dozen Star Alliance member-airlines that fly to 1,300 cities and operate 18,500 daily flights.

The airline has about 124 aircraft, and expects some of the 11 Boeing Dreamliners it has ordered to be delivered over the next one-and-a-half years. One of the Dreamliners will fly in the Star Alliance livery (a paint scheme on the aircraft) to publicize Air India's entry into the world's biggest airline club. Air India is the only Indian airline that is a member of a global alliance, to which it adds a total of 400 daily flights and over 40 new destinations in India.

Air India joining Star Alliance, whose members include Deutsche Lufthansa AG, Singapore Airlines Ltd and Delta Air Lines Inc., has ensured that the flow of traffic that could have been diverted to Abu Dhabi with Etihad Airways PJSC buying a stake in Jet Airways (India) Ltd, will be addressed to some extent.

Star Alliance's share of international traffic to and from India increased from 13% to 30% by adding Air India into its network. Jet has a 16% share.

Air India entered the alliance on its second attempt. In 2011, Frankfurt-based Star had put Air India's entry on hold. A few months later, it became clear that Star was pushing to bring Jet Airways into the alliance. Mint first reported this on 1 August 2012, citing internal letters written by Jet and Schwab to the aviation ministry. A copy of the letters had been reviewed by Mint.

On Friday, Schwab indicated that the offer to Jet Airways was a thing of the past. "The fact of the matter is that the carrier never actually applied to join Star Alliance. They were going through a whole series of business models and I think they decided to take a different path," he said.

Copyright 2014 - Mint, New Delhi

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