There’s One HUGE Change Air India May Have to Make As it Joins Star Alliance

Air India was invited to join Star Alliance in 2007. Joining an alliance generally takes about 2 years. Air India couldn’t get their service and IT systems in order to meet base level standards of the alliance, and their invitation was suspended in 2011.

Alliances have wide-ranging requirements to ensure that the reputation of its members reflects well across the rest of airlines that are a part of the alliance. There are safety rules, minimum service standards, and a huge need for integrating IT systems. And these are extensively audited as a part of the joining process.

There’s huge potential gain, but joining an alliance entails a cost to meet these standards — and though readers will no doubt offer counterexamples it requires building a culture that matches first world expectations (insert United Airlines joke here).

Air India is back, and expected to join Star Alliance July 11. Star was backed into Air India as their only choice in this huge market.

As Air India’s original application to join Star crumbled, the alliance began talks with Jet Airways to become India’s Star Alliance member. At the time the Indian government made clear that they wouldn’t permit Jet to join an alliance until Air India did. (Kingfisher was slated to join oneworld, which is led by American Airlines and British Airways, but went bankrupt before they could do so.)

The Indian domestic market is brutally competitive and loss-making. The government requires an airline to fly domestic only for 5 years before being permitted any international routes. So they burn cash trying to make it to 5 years, where they can get on the other side of that rule and become relatively protected from competition.

Flying international is one thing. Being international is something else. The Times of India carries one big change on the horizon for Air India:

Will Air India’s entry into Star Alliance from July 11 finally achieve the impossible: Clamp the brakes on free upgrades that netas, babus, other influential people and their kin have enjoyed for years by buying the cheapest economy tickets but getting ‘bumped’ up to business or first class? Or check the age-old practice of AI employees filling up these seats?

…Now who actually enjoys these benefits — premium full-paying passengers of Star and AI or the used-to-freebies politicians, bureaucrats, the well-connected and their kin or maids — has become a million-dollar question. Almost every day, the aviation ministry gets dozens of letters from everyone who is a someone to get upgraded on AI flights. “All aviation ministers have routinely obliged fellow politicos and the ministry’s bureaucrats have similarly helped fellow babus and their families. Our own staff feels belittled if not accommodated in the premium classes — a section of pilots went on strike on this issue! This needs to be checked now,” said a well-meaning official who has long frowned at these practices but was so far helpless due to reckless ministry interference in all governments till UPA-II. Whether NDA-II proves to be different remains to be seen.

Ultimately an interesting story developing here about the effect of international institutions on local culture. Of oourse it isn’t as simple as one or the other winning out, Thai Airways for instance is far more professionalized for being a member of Star but is run very politically and vcaters to the whims of the political and military classes.

(I thank Tyler Cowen for the pointer.)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Gary, some clarification please . . . . Does *A have some form of anti-cronyism requirements for continued membership, or do you suggest that in practical purposes, Air India will need to reform?

    I can certainly see that if their own members redeem on other *A carriers, in practical purposes – when they occasionally perform their accounting true up among members – they will need to have numerous premium seats made available to partners in the mix, lest they need to pay actual cash to compensate partners.

  2. There was a newspaper story a couple years ago which detailed how an Indian bureaucrat wanted to fly his family in First Class to Europe, but the plane flying that route that particular day didn’t have F. So he made them substitute an aircraft which did, which ended up displacing passengers in economy because of different seat arrangements.

  3. I could point out a few other Star Alliance carriers with deeply rooted cronyism… South African Airlines, Aegean, basically any national carrier. They just don’t have to compete like US airlines do. Maybe the culture in India makes it more blatant, but knowing someone at many national airlines is the best way to score that upgrade.

  4. Award availability on AI will be elusive at best, and most likely non-existent. *A may “require” certain standards of partner airlines, but who/what entity in *A will oversee compliance? Will someone at *A sit at a computer and try to find award space? Will award space show online, but not be available on the ground? Really, I can’t imagine AI cleaning up its act anytime soon. Too much cronyism and corruption. Sign me, Not an Optimist on This One

  5. @jfhscott – i am not aware of anti-cronyism rules as such, but bringing themselves into the community of world airlines as part of an alliance requires substantial change across the organization

  6. Some years back there was an attempt to privatize AI which fizzled out primarily due to the fear of the ruling politicians losing their privilege of free upgrades, sometimes at the cost of bumping paid passengers. The current administration in New Delhi might push for privatization which will cut down on influence peddling, boost the employee morale and improve its performance. As a side note, many of the AI execs got promoted before the new Govt. installed, in anticipation of their noose being tightened by the new sheriff in town; remains to be seen if there will be a rollback of this blatant act of mass promotions carried out in spite of a court order prohibiting it.

  7. I make it a practise to avoid Air India at all costs – I am of Indian origin. If there is any hiccup (delayed flight, mechanical issues, etc.) there is lack of accountability on the part of Air India. At times the staff wont even show up at the counter to avoid the issues that arise. Star Alliance or not, it will require a change of culture at Air India before I actually use the airline. I wish the govt wouldn’t restrict Jet Airway entry into Star Alliance.

  8. I love Indian culture, food and bollywood but maybe not Indian flights. Adults talk so loud. Kids unruly and noisy. What’s worst is every one shamelessly keeps passing gas. The smell of farts and strong Masada mixed while flying for 12 hrs is horrible.

  9. I think it should the other way around. Star alliance should now be very worried. The Netas and Babus will now expect upgrades and privileges on all Star Alliance flights!

  10. @Neech – They’ll probably demand unlimited award availability on *A flights, too.

  11. Egyptair had the same problem and guess what: nothing changed! 🙂

    I suspect Air India will continue the same way.

  12. On the one hand it would be quite favorable to include AI into the Star Alliance Network.

    However: The idea that it will be possible to hold AI to int’l standards re upgrade policies etc. is, sorry to say, ridiculous.

    Anyone who has ever flown to and from India, or within India, has seen that two full Moons rising tomorrow night is more likely than the attempt of controlling our beloved Indian friends when it comes to them having to let go of their habits.

    … just try to get on a plane in Delhi or Mumbai and watch what happens in the boarding process …

    I love the Indians and their culture. But there’s a price to be paid … It will be a very interesting experiment if AI joins the Alliance.

  13. @Nick thanks for the insight. I was wondering why on my BA flight JNB to LVI I was the only person in business class but on the return on SAA, business class was full.

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