Star Alliance members reject Air India, invite Jet Airways. Air India should choose oneworld

The Star Alliance, a global grouping of 27 airlines, has rejected the application of national carrier Air India to join the group. In over 14 years, and 28 applicants, this is the first time the application of any airline has been rejected.

A source, who wants to remain anonymous, confirmed, the alliance had effectively rejected Air India’s application last year itself, but for diplomatic reasons termed the action, at that time, as a “suspension”. The mountainous losses of Air India, and its crashing brand value, especially due to the recent pilots’ strike, proved to be the proverbial straw that broke the camel’s back. At a recent meeting, it is learnt, the majority of members of the alliance voted to reject Air India’s application. The ballot is done in extreme secret and even the alliance members do not know of the vote of other members.

This rejection opens the door for India’s largest private airline, Jet Airways, who has always eyed joining the alliance. Our co-editor Vinay Bhaskara has done an analysis on what this means for Jet.

As per a report in the Business Standard,

Ajit Singh, Minister for Civil Aviation, Government of India, said, “To be part of the Alliance, every member has to agree and that has not happened, especially after the pilots’ strike, when we lost a lot of credibility. They have practically said no, and had sent us a letter last week. We have asked Air India to look for other options and alliances.” Air India will now hold talks with other airline alliances like Sky Team and One World,

Which alliance for Air India?

In our opinion, oneworld will be the next best choice for Air India. The alliance is strongly committed to India, coming agonisingly close to being the first alliance to induct an Indian carrier, Kingfisher Airlines, before the carrier financially imploded. The alliance has also seen the closure of other members, Hungary’s Malev and Mexico’s Mexicana. So it is hungry for new members. The CEO of oneworld, Bruce Ashby, has strong Indian aviation experience as CEO of LCC IndiGo, and can work the delicate egos of the Indian bureaucracy.

Air India already operates flights to many oneworld hubs, London (British), Chicago and New York (American), Hong Kong (Cathay), Singapore (Cathay and Qantas), and Tokyo (JAL). Soon it will also commence flights to Sydney, hub of Qantas. Conversely, all existing oneworld carriers, save American, Qantas and LAN, operate to either, or both, Air India’s hubs in Delhi and Mumbai.

oneworld currently has a weak presence in the Indian and South Asian market, and lacks strong connecting hubs east of Helsinki and west of Singapore. Amman, Jordan is too small, and Colombo, Sri Lanka is too far South.

Along with Air India, oneworld can bridge this gap and gain a commanding presence in the Gulf to South-East Asia geography with the upcoming entries of Malaysia Airlines, and Sri Lankan Airlines.

T3 in Delhi is already a true connecting hub for Air India, has an existing strong portfolio of destinations, not just in India, but across south Asia, and the Gulf. One the integrated terminal 2 is completed in Mumbai, it will only add to the hub strength of Air India.

Adding Air India to the fold would also solve one of oneworld’s biggest problems; getting passengers to and from secondary Indian destinations. Air India already operates connecting flights from various cities across India to connect and feed its long distance international flights from Delhi and Mumbai.

Having solved many of its system’s problems during the attempted integration with Star, Air India will also be far more ready, and its integration quicker, should oneworld decide to pursue a partnership.

Air India used to provide good inflight service, and with the assistance of oneworld and the backing of respected airlines like British Airways and Cathay Pacific would hopefully allow Air India to re-shape itself as an excellent service provider.

Frequent Flyer Programme

With Jet being invited and a virtual shoo-in to join the Star Alliance, its frequent flyer programme (FFP) JetPrivilege is going to get a massive boost, with members being able to accrue and redeem miles across all the member airlines. Air India’s Flying Returns FFP risks being swept away and becoming irrelevant as both passengers and partners seek a broader base.

 oneworld members have been voted as having the best FFPs in the world, American Airlines in the Americas, British Airways in Europe and Africa, and Cathay Pacific in the Asia, Middle East, Oceania geographies respectively. An alliance with oneworld will also provide Air India the similar broad-basing as well as linkages with existing oneworld partners in the non-airline section.

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About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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