Air India Ltd, the nation’s biggest overseas carrier, will join an alliance of global airlines and set up a hub in Europe to take on increasing competition for flights to North America.
The carrier is in talks with three airports in Europe for setting up the hub for long-haul flights, chairman V. Thulasidas said in New Delhi on Wednesday, without elaborating. Competition for the lucrative North American market from India is increasing, with Jet Airways (India) Ltd starting flights to the US and Canada this year.
Other private airlines expect the government to ease rules, allowing them to ply overseas before completing the mandatory five years of flying within the country.
Jet Airways started flights to the New York area’s Newark Liberty International Airport, connecting through Brussels. UB Group’s Kingfisher Airlines Ltd has applied to start flights to New York and San Francisco by April, chairman Vijay Mallya said on Tuesday.
State-run Air India started daily flights to New York from Mumbai on 1 August with two new Boeing 777-200 LR planes, which will be followed by flights from New Delhi, starting early 2008. The carrier, which is being merged with Indian Airlines Ltd, the second-biggest domestic airline and also state-run, plans to start more flights to the US and Canada. Jet Airways said it will start flights to Toronto from New Delhi via Brussels five times a week from September.
Air India may join Star Alliance, the world’s largest grouping of airlines that has Deutsche Lufthansa AG and Singapore Airlines Ltd among its members, local media reported earlier. SkyTeam Alliance and OneWorld are the other alliances.
Star Alliance plans to name a new member from India, which may either be Air India or Jet Airways (India) Ltd, chief executive officer Jaan Albrecht said on 19 April.
“An announcement will be made jointly by the alliance we are joining and the airline,” Thulasidas told reporters. He didn’t elaborate. Air India is expected to soon receive approval from the ministry of corporate affairs for the merger with Indian Airlines, Thulasidas said.
Air India’s profit declined to Rs14.94 crore ($3.6 million) in the year ended 31 March, 2006, from Rs96.36 crore a year earlier as it lost market share to new and existing carriers.