New Delhi: Naresh Goyal-controlled Jet Airways (India) Ltd, the country’s biggest carrier, has sought government permission to join the world’s largest airline grouping, Star Alliance Services GmbH, putting the aviation ministry in a bit of a spot.
State-owned Air India Ltd had been all set to become a Star Alliance member before being snubbed by the group in 2011 towards the end of the admission process on the ground that it hadn’t met conditions. It was the first time in 14 years that an airline’s application to join had been rejected in this manner. The ministry said Star had imposed terms that were unacceptable.
Jet wants to join the grouping to expand its international base. International airline alliances such as Star, Oneworld and SkyTeam provide several benefits to members including streamlined service standards, common lounges and partnerships with leading global carriers, besides access to new markets and premium customers.
“In order to build the right global partnership and to support our future expansion plans, Jet has been evaluating the potential of joining a global alliance. We are pleased to inform you that we have made the decision to join Star Alliance,” Jet Airways senior vice-president, planning and alliance, Raj Sivakumar, said in a 16 July letter to aviation secretary Syed Nasim Zaidi.
“We request ministry approval to join Star Alliance. This would allow us to complete the comprehensive integration process as soon as possible in order to be better prepared for our planned international expansion,” said the letter, a copy of which was reviewed by Mint.
Jet also said it “has planned its international network anchored around the world class hub in Delhi and the fast developing Mumbai” and was thankful to the ministry “for the grant of capacity entitlements and traffic rights to support this plan.”
Jet chairman Goyal and Star Alliance CEO Mark Schwab had met to discuss the plan before a letter from Schwab was sent to Goyal on 8 March.
“I am writing following our last week meeting to confirm the interest of our members in naming Jet Airways in Star Alliance. Our members feel that the membership of Jet Airways in Star would be of mutual interest to them and Jet Airways, evidenced by the continuing discussions over several years. We trust that you share the same view,” Schwab wrote in the letter to Goyal, a copy of which was reviewed by Mint.
Once Jet confirms interest, the board of Star will have to clear the proposal.
“To move this along, I would invite you to confirm the interest of Jet in joining Star Alliance, which we would take to the chief executive board for final approval and following which, we would establish project teams to manage and drive integration process,” Schwab added.
An email sent to Jet Airways spokeswoman remained unanswered. A Star Alliance spokeswoman did not offer any immediate comment.
Star is the largest of the three alliances comprising over two dozen airlines, including Deutsche Lufthansa AG, Air Canada, Singapore Airlines and Thai Airways International PCL.
Before its rejection, Air India had paid a total €10 million (around Rs.69 crore) since May 2008 as part of joining fees to Star. It had also terminated relationships with rival grouping members Air France and Royal Jordanian Airlines, besides refraining from signing any new code share agreements with other airlines as part of the process, Mint reported on 8 September.
Former aviation minister Vayalar Ravi had told Parliament in August last year that Star had imposed new conditions on Air India that were unacceptable.
A senior government official who declined to be named said that the aviation ministry was looking into the Star issue and the matter would be resolved soon.
Air India and the erstwhile Indian Airlines have suffered due to the absence of a clear government policy. Indian Airlines and Air India were merged in 2007 to form National Aviation Co. of India Ltd, which was later renamed Air India Ltd.
“It is my considered opinion that from 1995 onwards Jet Airways was and is the national carrier and the erstwhile Indian Airlines and Air India the national scapegoats,” said Shakti Lumba, former vice-president with airlines such as IndiGo and Air India. “Aviation rules, requirements were changed to disadvantage both Indian Airlines and Air India. Any coherent aviation policy proposals made after 1995 for the good of the industry never saw the light of day due to vested interests. India still awaits a coherent civil aviation policy.”
Graphic by Sandeep Bhatnagar/Mint