To map out Air India’s ambitious expansion plans, the chairman of Tata Sons and Air India, N Chandrasekaran, met simultaneously with the CEOs of Singapore Airlines (SIA), Goh Choon Phong and the Lufthansa Group, chairman and CEO Carsten Spohr, in India last week.
While the German mega carrier aims to strengthen its current alliance with the Maharaja in several ways, including an expansion of codeshares and possibly including engineering and aviation training, SIA will hold a 25.1% stake in the new Air India.
India has historically lacked a sufficient place at the (global) aviation table. Air India has the potential to do something significant that will change Indian aviation, with SIA on one side (east) and Lufthansa Group on the other (west).
As a partner, it would be an honour for us to assist in elevating AI to its proper position on the world stage. It is due to Air India. India is due it between 2001 and 2006, Spohr, a Lufthansa pilot said. He claimed that in the long run, the current high demand might allow the new AI to “redefine its role” in the Indian market.
Up until now, an excessive amount of traffic travelled between India and Europe and the US via other hubs, like those in the Gulf. India, home to the world’s largest aviation market and its flag carrier Air India ought to hold a larger portion of that market, Spohr said.
Another hub and hub airline for traffic between Southeast Asia, the Southwest Pacific and Europe is India and AI is “well-positioned” to serve.
Spohr added, “We (AI, SIA, and Lufthansa) are a very strong triangle. Deeply connected to United Airlines in the US, Lufthansa Group will speak with them “about possibly turning it into a rectangle. Having a strong partner in the US market helps to be successful.”
The Lufthansa Group is also investigating additional business prospects with the new Air India. “We operate a sizable aviation training facility for pilots and flight attendants. I see many chances for growth. If Air India needs engineering assistance, Lufthansa Technik might be able to help,” said Spohr.
“India has not had an adequate seat at the (global) aviation. Air India with SIA on one side looking east and Lufthansa Group looking west has potential for something big, something that can change Indian aviation. As a partner it would be a privilege for the Lufthansa Group to help bring AI to its rightful place on the global stage. Air India deserves it. India deserves it.”Carsten Spohr, Chairman and CEO, Lufthansa Group
Air India’s fleet is set for a massive overhaul, with around 500 new aircraft expected to join over the next decade. In an attempt to build a global brand, Air India would need high-level crew training and technical support.
As Air India launches more international flights to Europe, it would need to create more connection opportunities in an enhanced partnership. Since no airline, no matter how big it is, can fly everywhere, enhancing networks means connections through partnerships with other carriers becomes crucial. “AI has SIA and we can be a strong ally as well. No airline can do it alone – everyone needs partners,” Spohr said.
Airline alliances typically develop gradually, beginning with shared access to frequent flyer programmes, then code-share flights and joint fares and may eventually result in a joint venture, including “metal neutrality,” in which partner airlines behave as though they were one.
Carsten Spohr is planning to be back in Mumbai with his top management team in March. “There is no other country that I have visited twice within just four months”. Lufthansa Group, Tata Air India and SIA have agreed to continue talks between now and then. “The atmosphere of our talks is very good and I am confident we will see significant progress.”
(With Inputs from The Times of India)