Struggling Air India faces hurdles in joining alliance

NEW DELHI — Air India, the troubled state-owned airline, risks being rejected by the Star Alliance network of airlines because of delays in fulfilling membership conditions, an executive from Star Alliance said Monday.

The move puts in jeopardy a main element of the airline's turnaround plan.

Star Alliance first invited Air India to join the group of 27 airlines, which includes Air China, Singapore Airlines and United Airlines, in December 2007. Air India said in March 2007 that it would merge with Indian Airlines, the state-run domestic carrier.

Air India — which has a fleet made up of Airbus and Boeing planes and has placed orders for the Boeing 787 Dreamliner add — is hemorrhaging money and lost about $1 billion in its most recent accounting year. Customers, driven away by frequent strikes and delays, are shifting to more modern and efficient private carriers in India.

"We have indicated to Air India that they will have to be ready to join, by latest, end of July," said Markus Ruediger, media-relations director at Star Alliance. There are "items outstanding" on a list of about 80 requirements, he said.

He did not elaborate about what Air India still needed to do, but he said Star Alliance had already made it clear that Air India had been given extensions and had taken longer than expected to fulfill the requirements.

It is "not in their interest to delay any further," he said. "We made it very clear that we expect them to meet all the requirements by the end of July, bearing in mind that on average integration takes around 18 months."

Air India executives have said in recent months that joining the Star Alliance is a main part of the airline's turnaround plan. Frequent travelers often book flights based on whether an airline is part of their global network, which earns them frequent-flier miles when they travel.

Membership in the Star Alliance could increase Air India's revenue 9 to 15 percent, a company executive told The Hindu, an Indian newspaper.

"We are talking to them and it is between us and them," an Air India spokesman, Kamaljeet Rattan, said Monday when asked about the Star Alliance membership. "We would not like to go public about it."

Air India is far behind rival airlines in some respects. For instance, the airline still does not use computers to make schedules for its 1,600 pilots, relying instead on pencil and eraser in a ledger.

Star Alliance has often said that the Indian market is large enough that it could invite two airlines to be members. Star Alliance's major rival, Oneworld, is aligned with Kingfisher Airlines in India.

Information from The Seattle Times archives is included in this report.