By Rohit Vaid
Air India stands to gain upto $100 million (over Rs.600 crore) in the first year of its membership of Star Alliance, the the world’s largest airline accord that brings together 27 carriers for increasing passenger share and earnings, the top official of the grouping has said. It’s an infusion that would greatly help Air India in its turnaround efforts.
Star Alliance chief executive Mark F. Schwab said that Air India is expected to gain around $50-$100 million as a result of its entry into alliance, which would account for revenues from transfers, saving synergies and better reach to passengers.
“Its just the beginning. As and when Air India completes a full year of membership, you can see gains of at least $50-$100 million,” Schwab said on the sidelines of the first Star Alliance Chief Executives Board (CEB) meeting held in India.
Star’s current network has over 18,500 daily flights to 1,321 destinations in 193 countries.
“India is the world’s fifth largest domestic aviation market and will continue to grow both domestically and internationally. It is therefore essential for Star Alliance to have a strong presence in this market,” Schwab added.
Air India chairman and managing director Rohit Nandan was equally upbeat.
“Our total inbound transfers from Star have increased by 50 percent. The airline has also witnessed an increase of 33 percent in the number of passengers transfered between Air India and other Star Alliance member carriers,” Nandan said on the sidelines of the CEB meeting.
“We are making significant gains out of our membership and this is just ths start as we have just joined the alliance,” he added.
According to Nandan, the airline is looking at closer interaction with member airlines and has signed a code-share agreement with Air Canada besides signing MoUs with Avianca and EVA Air.
“By March we aim at code-share agreements with most Star Alliance member airlines,” he said.
Star Alliance, through 13 of its member-airlines which operate from India to 10 destinations, accounts for 13 percent of India’s in-bound market. The inclusion of Air India in the Alliance will take this to about 30 percent.
Air India, on the other hand, has over 400 daily flights to more than 50 domestic and 33 international destinations, and is expecting a 10 percent jump in revenues in the current fiscal itself due to joining the Alliance.
It was only in July, after eight years of uncertainty and a host of hiccups before Air India finally joined Star Alliance, thus providing the 60 million passengers who fly from the world’s fifth largest aviation market access to better global connectivity.
The global alliance has given its passengers further reach and more choices in the international market, as well as the ability encash flying miles with other airlines and entry to some of the finest airport lounges of the 27 member carriers of Star Alliance.
Frequent Flyers are also taking advantage of Alliance benefits, with over 80,000 having earned miles while flying on Air India since July and more than 20,000 Air India Flying Returns for flights on carriers of other Star Alliance members.
Air India’s passengers are now able to get direct connections to places in the North American and African markets on a single ticket.
Previously, passengers on Air India’s flights to the US and Europe did not get easy connecting flights to other far-away destinations. This changed as alliance members are now able to provide single ticket travel to most of the in-route and off-beat destinations.
Air India has got an advantage for cost-savings, as the Alliance makes bulk purchases of fuel as a single entity. Apart from this, Air India has been planning to add other unique characteristics like the Star Alliance passenger seats on board its fleet.
Currently, the airline has a 99-strong fleet, a mix of B-787 Dreamliners, B-777s, A-330s and the A-320 family, which is also one of the youngest in the world.