The Telegraph
Wednesday , October 10 , 2012
Since 1st March, 1999
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AI redoubles Star Alliance entry efforts

New Delhi, Oct. 9: German carrier Lufthansa has emerged as the pivot of Air India’s renewed thrust to join the Star Alliance airline group.

Air India has failed to join the 27-airline club for a long time even though it managed to fulfil the entry criteria.

Civil aviation minister Ajit Singh today said he would ask Lufthansa to help Air India to get entry into the coveted group as promised by the airline when it was allowed to expand in India.

“We literally opened the skies for the airline in return for it mentoring Air India to get entry in the international airline group. We gave Lufthansa a lot of facilities and now we want it to hold good on its promise and adhere to the plan we had,” Singh said on the sidelines of the Economic Editors’ Conference.

Singh said he had no objection to any other Indian private airline, namely Jet Airways, joining the alliance. After Air India’s entry was put on hold, Star Alliance contemplated inducting Jet Airways alone. Both the ministry as well as Air India had objected to Jet’s entry before the national carrier.

Rohit Nandan, chairman and MD of Air India, had recently sent a letter asking the ministry to defer Jet Airways’ entry into the alliance.

“We can allow two airlines to join the alliance, but we want Air India to become a member as it was promised by Lufthansa which was mentoring Air India to become part of the group,” said Singh.

In August last year, Star Alliance suspended Air India’s integration into its network when several members opposed its entry saying it did not meet the minimum joining requirements as stipulated in the contract signed in 2007.

Air India denied the claim saying it had met all the criteria set by the group.

Meanwhile, the government has decided to guarantee Air India’s non-convertible debentures (NCDs) worth Rs 7,400 crore, which will pave the way for the ailing carrier to pay off its short-term loans.

“The ministry of finance has approved the unconditional and irrevocable guarantee for Air India NCD bonds today for Rs 7,400 crore,” an Air India spokesperson said.

Singh also expressed concern over the shrinkage in air passenger traffic numbers in the last three months but hoped that the buoyancy in the sector would lead to a spike in the long-run.

Official figures have shown that in July-September, air traffic has fallen month-over-month by 9-11 per cent.