India becomes integral link for Star Alliance
The Star Alliance Chief Executive Board (CEB) meeting was held in New Delhi recently, and reflected on Air India’s first six months as the latest member of the team.
Air India represents a new market for Star Alliance, and as Star Alliance’s CEO Mark Schwab said, “It was important to fill the gap in the network and begin participating in this rapidly growing market.”
Discussions between India and Star Alliance kicked off back in 2007, with the final culmination coming when Air India joined the Alliance in July this year.
After experiencing a significant period of struggle with economic recession in 2008 and 2009, Air India also endured a “mismatch” of goals and capability, according to chief managing director Rohit Nandan.
“The market of India was expected to grow by more than 12%, but this didn’t happen,” he explained, adding that the surge of the dollar also affected the airline’s profitability.
The restructuring and turnaround plans for Air India began in 2012, and according to Nandan, the airline is expected to be cash positive by 2018, and profitable after tax by 2022.
“We are confident we are moving in the right direction,” Nandan stated, and with 14 airlines now serving India, and 3200 flights moving in and out of the country each week, he’s certainly not wrong.
Around 30 countries are served by Air India now, with 43 destinations enjoying the seamless connection now afforded as a member of Star Alliance.
Nandan emphasised that Air India obtaining membership to Star Alliance was a key pillar of the airline’s turnaround strategy, along with the fleet renewal, network optimisation and initiatives to improve service quality.
It was “an alliance of mutual interest,” Nandan said, with the airline looking to “fill a gap in India’s market” through the joining with the Alliance.
Improving infrastructure in India is paramount for Schwab, who commented that Star Alliance was focussing on co-locating Star carriers in airports and terminals developed by its members.
“We are focusing on enhancing the connection experience from domestic to international, and international to domestic,” Schwab said.
Nandan also added that Air India had experience an “improved brand image” as a result of becoming a member of Star Alliance, with a 10% growth in passenger numbers, and a 13% growth in revenue since kicking things off with the group.
“We have identified 20 areas where we are lacking,” Nandan admitted, not detailing where these weaknesses lie, but saying the difference between Air India now and five years ago was a testament to its changing quality of service.
Air India is now looking to closer interaction with Star members, with a codeshare already established with Air Cananda, and an expectation to have codeshares with most Alliance members by early next year.
President and CEO of Air Canada and chairman of the Star Alliance CEB Calin Rovinescu said that Air Canada’s decision to resume flights to Delhi next year is in part due to the fact it can now offer better connections to over 40 destinations from Delhi, saying this was “big news considering the Indo-Canadian market”.
Copenhagen and Stockholm are currently the flavours of the month in terms of potential new long-haul options for the national carrier, according to Nandan.
Nandan added that he was confident that Air India’s request to join Heathrow’s Terminal 2 would be granted, saying, “London is our main destination in Europe and anything we can do to offer better transfer facilities would be a real gain for us and Star Alliance.”
No discussions are currently underway with regards to adding a second Indian carrier, Schwab said.
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