The Telegraph
Tuesday , August 9 , 2011
Since 1st March, 1999
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AI to seek Star Alliance fee refund

New Delhi, Aug. 8: Air India will talk tough when it meets Star Alliance on the issue of failed membership.

The national carrier will ask Star Alliance to return the amount paid as membership fees. Air India is also planning to ask for a hefty compensation for the sum spent in preparing itself for Star’s membership.

Star Alliance, a global group of 27 international airlines, announced last week that it was suspending Air India’s integration into its network as the carrier had failed to fulfil some norms.

AI officials said they were in talks with Star Alliance officials for a meeting to discuss the reasons of suspension as well as to ask them for a refund.

“The date of the meeting has not been decided as of now but it might happen later this week. Star Alliance officials have said they were considering ways so that they can accommodate AI into the international group. But we are more interested in discussing about compensation as last week’s events have caused us a lot of embarrassment and a major setback,” said an AI official.

The civil aviation ministry will soon start the process of recovering the 10 million euros (Rs 63 crore approximately) as joining fee they had paid. A decision to suspend Air India’s integration with the alliance was jointly taken by 27 member airlines.

Air India’s entry into the alliance had got delayed as it did not have an integrated IT system between the erstwhile domestic operations and its international operations till February this year. Lufthansa was mandated to be the mentor airline for AI in the alliance.

Immediately after Star Alliance denied AI membership, other global alliances such as Oneworld and SkyTeam approached the civil aviation ministry with membership offers.

AI might consider the two offers, but according to officials no talks have taken place with the two alliances.

Kingfisher is already in the process of becoming part of the Oneworld alliance.

Civil aviation ministry sources claimed that AI did not make it to the list as it did not agree to the demands of the international body.

“They wanted us to approve the entry of another private airline from India. They also wanted permission to code-share all their members with these two airlines and not exclusively Air India. The ministry did not agree to these conditions,” said a source.

Membership of the alliance would have ensured a fixed revenue for Air India, and it was a crucial part of the carrier’s turnaround plan.

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