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‘Air India’s possible entry into Star Alliance will boost revenues’

‘Air India’s possible entry into Star Alliance will boost revenues’
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First Published: Sun, Mar 13 2011. 05 40 PM IST
Updated: Sun, Mar 13 2011. 05 40 PM IST
Berlin: India’s national carrier Air India’s expected entry into the elite Star Alliance later this year will expand its global footprint and boost its revenues, according to the airline’s Frankfurt-based regional manager for central Europe Ratan Bali.
The last major hurdle for Star Alliance membership was removed when Air India and the Indian Airlines completed the integration of their codes and began using a common code two weeks ago, Bali told PTI at the travel trade show ITB Berlin.
The world’s biggest fair, which kicked off on 9 March, concludes on Sunday.
A common code for both the airlines was a condition for Air India to join the alliance, he added.
The airline also started using a new reservation system in preparation of joining the alliance.
Star Alliance network is a global leading airline network, in terms of daily flights, destinations and countries flown to and member airlines.
It was established in 1997 to offer customers worldwide reach and a smooth travel experience. In order to become a member, an airline must comply with the highest industry standards of customer service, security and technical infrastructure.
Bali said the planned delivery of the first batch of Boeing 787 ‘Dreamliner’ aircraft to Air India later this year will also play a crucial role in expanding the airline’s international operations.
These aircrafts, which have an eight-hour flight range, could be deployed in the Indo-European or Indo-far east sectors, he added.
Air India has placed orders for 27 ‘Dreamliners’ and Boeing had recently announced that the first batch of aircraft will be delivered by the end of this year.
Talking about revenue, he said Air India has recouped its revenue losses from the closure of the European hub at the Frankfurt airport last year, by increasing the passenger volume and reducing its operational costs in Frankfurt.
As part of its operational restructuring process, the airline rerouted four flights operating from Delhi to Chicago and from Mumbai to New York via Frankfurt airport as direct flights on the India-US routes.
It closed down its European hub in Frankfurt at the end of last year. Since then, the airline has been operating a daily non-stop flight between Delhi and Frankfurt.
According to Bali, the loss of revenue for Air India due to the diversion of the four flights was “minimal” and was offset by a 70% reduction in the operational costs in Frankfurt.
Air India lost some passengers after it took out four flights from the commercially important India-Germany route. But the loss of revenue was recovered by a higher utilization of the seat capacity in the economy class and by increasing the number of first and executive class passengers on board the Boeing 777 200LR aircraft.
“The seat factor on these flights rose to 74%,” he said.
The diversion of the flights had very little impact on Air India’s transatlantic traffic because the airline was already facing stiff competition from other major airlines on these routes.
Air India’s passengers bound for the US or other destinations, however, could continue their journey from Frankfurt on board Lufthansa flights because of a code-sharing arrangement between the two airlines.
On expansion Bali said Air India plans to launch new flights connecting Frankfurt-Delhi service with Melbourne and Colombo.
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First Published: Sun, Mar 13 2011. 05 40 PM IST