The entry of Air India in to the Star Alliance is delayed by at least one year to the first quarter of 2010.
Star Alliance founder, Lufthansa was a sponsor for Air India joining the Star Alliance. Since 2004, Air India has operated code-sharing flights with Lufthansa between Germany and India.
18 months ago, the Government of India decided to merge Air India and the erstwhile Indian (formerly Indian Airlines). The process of merger, which was to have been completed in 2008, has been severely delayed due to "integration" issues. Apparently there is major confusion at even the most basic levels between the staff of the two airlines, with no clarity on who is responsible for what. Where have we heard of this before?
While Star Alliance and Air India signed a non-disclosure agreement last year, the compliance is yet to be done. The IT systems are no where close to integration and Air India has not yet, even informed the Star Alliance, on which of the two systems it will finally be using. This is proving to the major sticking point for Air India's entry in to the global alliance.
Adding complexity to this issue are reports that mandarins at the Ministry of Civil Aviation of Air India owner, Government of India, are "upset" at reported talks between Jet Airways and the Star Alliance, whom they perceive as a threat to Air India.
Previously Jet Airways had an announced policy of remaining alliance neutral preferring to sign one-on-one bi-laterals instead. Delays by the US Federal Aviation Administration on Jet's code share deal with Star Alliance founder United Airlines have launched a diplomatic protest by the Indian government.
However, the extreme operating environment due to the on-going economic slowdown, the sheer size of India, and the desire of the Star Alliance to grow to 50 members especially regional airlines, may be tilting the scales in favour of Jet Airways joining the Star Alliance.
and I see not reason why can India not have two airlines participating in the alliance.
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