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Journalism of Courage
Delayed by over two years,the state-owned carrier Air India is set to join the global airlines grouping Star Alliance by July,said top airline sources. The airline has already completed all modalities and has also readied its brand book for entry into the alliance. It is likely to finalise entry details next week.
Air India implemented a single ticketing system across its domestic and international network in February,one of the mandatory conditions for entry into the alliance. Prior to this,erstwhile Indian Airlines that was merged into Air India in 2007,followed a separate ticketing system,which hampered seamless connectivity across the merged entitys network.
The entry will enable the airline to add depth to its offerings in the international sector by providing passengers last mile connectivity in the foreign countries. At present,the airline is losing money on long-haul destinations like the US as we cannot provide onward connections to other cities in the US at a competitive cost. For instance,Air India operates non-stop flights to New York and Chicago but has to tie up with local airlines for providing connections beyond these two cities. In a price sensitive market,this increases the total fare for customers on Air India, said the sources.
The average price on the Indo-US routes varies between Rs 45,000-Rs 50,000,but an Air India passenger shells out up to Rs 65,000 to cover journey beyond New-York and Chicago. This results in revenue loss of Rs one-two crore per day as passengers move away (to other airlines), they added.
Meanwhile,the airline has already completed other formalities like emergency services and quality management systems. The implementation of a single reservation system was a mammoth task and even as it was being carried out,we ensured that all other unrelated requirements were completed simultaneously, said the company official.
The airline received three extensions from Star Alliance grouping to put its house in order.
Any international airline,take for instance Emirates or Singapore Airlines,wants depth in the Indian market. With our entry into Star Alliance,we will be able to provide that,and at the same time utilise the depth of their network to provide onward connectivity to our customers, said sources.
Marred by vigilance complaints,the PSS or single reservation system tender got delayed and was finally awarded to global aviation giant SITA last year. While Kingfisher Airline is part of One World airlines grouping led by British Airways,Naresh Goyal promoted Jet Airways has separate agreements with global airlines.
Typically,joining an alliance enhances the airlines revenues by almost 5 per cent depending on the agreements signed and the network strength.
