What queered the pitch for Air India in its entry bid for Star Alliance is the latters insistence that rival Jet Airways also be allowed to become a member as and when it applied for one. In fact,according to government sources,Lufthansa (founding member of the grouping) that was hand-holding Air India in its membership bid,together with Star Alliance,wanted Air India to pitch Jets case with the government in due course. Clearly,this did not go down well either with the carrier or its owner,the government of India. Air India was denied entry into the 27 member-airlines grouping Star Alliance on Monday by a mail vote of its executive board stating its failure to meet entry requirements. In losing the bid,the state-owned carrier not only lost out on the prospects of enhancing its revenues by 10-15 per cent by adding depth to its international network but also Euro 10 million (Rs 63 crore) entry fee paid upfront in December 2007 and another $5-10 million (Rs 22-45 crore),as per the airlines internal assessment,on meeting entry requirements. According to Air India sources,the airline was fine with Jets entry despite it being a rival,but was against Star Alliances both or nothing condition. Both or nothing would mean that Jet and Air India both became part of the grouping,or Air India will not be allowed membership. When contacted,Lufthansa said in a statement,Lufthansa shares and reiterates Star Alliances long standing and well know position that more than one airline can join the alliance from important markets like US,China or India. In an internal assessment prepared by the government,reviewed by The Indian Express,first signs of drift appeared in a meeting of Star Alliances Chief Executive Board held in December,2010,as Air India neared the goal of completion of 87 mandatory Minimum Joining Requirements (MJR) the deadline for which was set as July 31,2011. At this meeting,CEO-Lufthansa said integration process with a second Indian carrier,Jet Airways,should start at the earliest. The suggestion was later followed up by the Star Alliances management board,which passed a resolution in March this year stating that Air India can be part of the network only if Jet gets permission to do so. In fact,it was keen that Air India pushed for Jet Airways case with the government as and when the latter applied for membership. Worldwide,except for the US and China,Star Alliance has allowed only one airline to be a member from a country. In April,Lufthansa Chairman was told by the civil aviation ministry that Air Indias entry cannot be linked to that of Jet Airways when the latter hasnt even sought the governments permission for joining the alliance. However,what irked the government most was when three months later (July 18),in a meeting of Star Alliance CEO Jaan Albrecht with the civil aviation minister drafted an undertaking to be cleared by the government. Civil Aviation minister Vayalar Ravi took an exception to it. They came with a draft of conditions to me. They should realise they can not dictate terms to the government of India, Ravi had told The Indian Express. The undertaking said that the government of India will approve a second carrier to join the alliance as and when an application is received. It also said that government will allow alliance members to enter into code-share agreements with other Indian carriers an area which is governments prerogative.
