In an indication that all is not over for national carrier Air India to become a member of Star Alliance, the carrier is going to reinitiate talks with German airline Lufthansa to push its case in the global airlines? network. Civil aviation minister Ajit Singh on Tuesday said the government will ask Lufthansa to start mentoring Air India again for the Star Alliance membership.
?The government has given so many facilities to the German carrier. We almost made it like an ?open sky? policy for them,? Singh said, referring to the number of flights and routes that the foreign airline was allowed to add on its Indian network. Asked if his comment was a warning that the government may pull out these facilities if Lufthansa did not agree to mentor AI, Singh said, ?We?ll see what steps to take once we start talking to the airline.?
The minister agreed that there were problems in the national carrier, but it has managed to overcome most of the issues. ?AI has manged to reduce its losses. Despite the reduction in capacity by around 17% due to strike, it posted an increase in revenue of 6.5% during April-August 2012 against the same period last year. The net losses have been lowered by R557 crore during April-July 2012 from R1,733 crore during 2011-12. So, things are improving and there is no reason why one should give up on the membership of the global alliance,? he said.
Star Alliance had suspended the membership of AI due to various reasons. After which, private carrier Jet Airways applied for the same. Singh said both Jet and AI can join Star Alliance at the same time.
The minister while addressing the economic editors? conference on Tuesday expressed concerns over the falling numbers of passenger traffic which has shrunk month on month basis by 9-11% during July-September period.
?Traffic numbers have fallen due to global economic downturn. There were worries about a downturn in the Indian economy. The GDP growth estimates have been lowered and airlines and hospitality industries are the first to suffer from this. We hope that in the long-run the traffic will increase. It is bound to increase,? he said.
The aviation ministry is also reworking the Aircraft Acquisition Policy, under which the domestic airlines might gave to acquire smaller planes to fly to smaller cities. ?They (airlines) would also be asked to submit the detail business plan for the next three years to understand how many planes would be required,? he said.
Meanwhile, the government has decided to guarantee AI?s non-convertible debentures worth R7,400 crore. The NCDs will be used to repay short-term working capital facility availed by AI from 19 banks.