India being the second most populated country in the world once had two big state owned airlines: Air India and Indian Airlines. The merger of the two airlines was approved by Indian state authorities earlier this year at the end of August, when the Ministry of Corporate Affairs issued its final approval to the application, thus establishing the new National Aviation Co. of India Ltd. that will fly under the Air India name.
“The merger of Air India and Indian will provide an integrated international and domestic footprint, which will significantly enhance customer proposition and allow easy entry into a global airline alliance,” the government said. “The merged airline has given them the opportunity to unlock significant synergies on account of optimal utilization of resources through improvement in load factors and yields on commonly serviced routes as well as deployment of ‘freed up’ aircraft capacity on alternate routes.”
The merged carrier will operate a fleet of 112 aircraft, including seven new 777s, 10 A320 family aircraft and four 737-800s introduced this year. The parent company will comprise the mainline (Air India), an LCC called Air India Express, Air India Cargo (which is in the process of acquiring 737 and A310 converted freighters and plans to be operating 10 aircraft within the next year), and ground handling and MRO divisions that will “gain increased focus on the merged entity,” the government said. Each will be managed as a separate unit.
Only one week after the approval of the merger, the new Air India’s board voted to join Star Alliance, according to the United News of India news service and The Economic Times. A formal announcement about Air India’s entry into Star Alliance is expected in December 2007, highly-placed Indian civil aviation ministry sources said – according to The Economic Times. The agreement would come into effect early next year, enabling Air India to provide seamless connectivity to its passengers across the networks of all Star Alliance partner airlines. However, no other details were revealed, and neither the airline nor the alliance issued a statement.
With most of the European, American and Far-Eastern carriers being already enrolled in an alliance the markets left without proper alliance coverage include China, India, Russia, the Middle-East and Africa. India will now be Star Alliance territory, while they will soon have two members in Africa (South-African Airways and Egyptair as AirlineWorld reported yesterday) and also two Chinese carriers are bound to join Star in the mid-term. SkyTeam currently seems strong in Russia and also has a Chinese candidate, while oneworld has Dragonair operating in China as an associated member, but on the other hand has the only Middle-East airline alliance member: Royal Jordanian. It will be interesting to see where the big Russian carriers, the big Chinese carriers and the rest of the African and Gulf Region carriers will join in.