The Naresh Goyal-promoted Jet Airways has reason to cheer, as the civil aviation ministry might give it permission to join the Star Alliance simultaneously with state-owned Air India. Earlier, the government wanted the Star Alliance, comprising 27 airlines across the globe, to decide positively on AI's membership first.
Last year, Star Alliance had snubbed Air India. Despite the process of admission being in the final stages, the airline's membership was put on hold because it did not meet certain conditions and all members of the Star Alliance had not approved Air India's entry.
About Jet's entry in Star Alliance, Ajit Singh, civil aviation minister, said in an interview with Business Standard, "We may consider about Jet's entry in Star Alliance simultaneously with Air India. We will also be working on Air India's entry in Star Alliance."
Aviation experts said for AI's entry in Star Alliance, the government can lean heavily on German carrier, Lufthansa, one of the founding members of Star Alliance. The ministry has also indicated that a lot of favours have been doled out to Lufthansa. In the Economic Editors' conference held in September, Singh had said, "A lot of facilities have been given to Lufthansa to get AI into the Star Alliance. We almost made India an open-sky (operation) for them. Now, we will ask them to facilitate AI's entry into Star Alliance."
A senior ministry official told Business Standard, "Swiss and Austrian Airlines, Lufthansa's partner airlines, which had earlier been acquired by Lufthansa, continue to function under bilateral agreements signed between India and the two respective countries. Lufthansa has not given the ownership figures for one of these airlines to the government."
Lufthansa, the mentor airlines in Star Alliance for Air India, has maintained that more than one airline from a country can become a member of the Alliance, as was the case with airlines from China, Africa and Brazil.
Air India had earlier opposed Jet Airways's proposed entry into the Alliance, alleging Lufthansa did not favour the state-owned airline, which the German airline denied.
An aviation analyst said, "If Jet Airways becomes a member of Star Alliance before Air India, it is likely to negatively impact the market share of Air India on international routes."
Air India and Jet Airways are already neck-and-neck in the international skies. In the first part of FY13, the national carrier and Goyal's airline had 15.80 per cent and 14.30 per cent market share, respectively.
Before Air India's application was put on hold, it had paid '10 million (about Rs 69 crore) since May 2008 to Star Alliance, as part of the joining fee.
Star Alliance is the largest of the three airline alliances in the world. The other two are SkyTeam and Oneworld. Star Alliance includes Deutsche Lufthansa, Air Canada, Singapore Airlines and Thai Airways International. A membership in the group ensures shared benefits to members and seamless travel to passengers. Facilities for Star Alliance member airlines are located close to each other at airports.
Common airport facilities, coordinated schedules, and a range of new technologies are also available to member airlines.