New Delhi: Civil Aviation Minister Ashok Gajapathi Raju on Tuesday announced the alliance of Air India with the Star Alliance group. The government expects that the step would help the ailing national carrier come out of its losses.
“This is the biggest alliance in 3 years. We think Air India will benifit out of this alliance. It will be a new beginning for Air India,” Raju said.
The Civil Aviation Minister also said that the step would ensure a wider reach for the passengers. “It is a win win situation for all,” he said.
Executives at Star Alliance met with Air India officials in London on Monday and agreed for the airline, which has been in talks to join since in 2013, to become its 27th member, Air India spokesman Praveen Bhatnagar said adding that Air India will formally complete the process by mid-July.
Membership allows Air India to share routes with the other airlines to more than 1,200 destinations, helping it to compete with Gulf carriers like Emirates, which have increased their share of long-distance flights into and out of India.
The move comes amidst reports that the Narendra Modi government is planning revamp of the aviation industry. The Civil Aviation Ministry had made several proposals to the Prime Minster during a presentation last week to bring changes to the ministry.
The PM had showed concern over the huge debt burden on the aircraft carrier. The PM has also stressed on priority being given to improve safety standards.
Sources say that the ministry is keen on reductions of ATF taxes levied by states to rescue operation cost of the airlines. It is also pushing for open access to aviation turbine fuel (ATF) fuel for airlines. The move would enable airlines to import ATF to airports rather than buy it from states at higher prices.
During the presentation to PM on Saturday, the Civil Aviation Minster along with the CA secretary were present. Sources say that the PM has showed interest in the reforms that were presented to him.