Bipin Shah   Self Employed
The civil aviation ministry has decided to temporarily stop granting Jet Airways (India) Ltd any new code-share agreements with foreign carriers that are members of Star Alliance until national carrier Air India joins the international grouping next year, two government officials said.

Air India was invited to join Star Alliance, the biggest of the three global airline alliances, in 2007 and is expecting to join by March. Jet, India?s largest private carrier, hasn?t said when it will join an airline alliance, though it has been gradually collaborating with member airlines of Star Alliance by entering into code-share agreements with them, a move that Air India and the aviation ministry are averse to.

?There can?t be two people in the same boat,? said a top ministry official, who asked not to be named. ?They can join (Star Alliance) after Air India has completed the process.?

Jet did not reply to a questionnaire seeking comments.

Star Alliance, OneWorld and SkyTeam are the three international airline alliances. Star Alliance members include around 28 airlines that operate 21,200 daily flights to 1,172 airports in 181 countries. Kingfisher Airlines Ltd is in the process of inducting itself into OneWorld alliance next year.

Jet has rapidly grown its international operations, which now account for around half its revenue, since 2006 by staying away from the three global alliances and entering into code-share agreement with individual airlines separately.

Code-sharing is a ticket-selling agreement that allows travellers to connect seamlessly to destinations on flights of more than one airline.

Jet founder Naresh Goyal told Mint in March that the airline will take a call on invitations from various airline alliances soon but did not specify a time frame. ?Everybody has offered, (but) we haven?t yet decided which alliance (to join). We are studying everything,? he had said.

However, of the 10-code share agreements Jet has forged so far with foreign airlines, it has at least four with Star Alliance members?Brussels Airlines, United Airways, ANA and Air Canada.

Some of these, including with one with United Airways, were cleared earlier this year by the aviation ministry and became effective from June.

The United Airways agreement, for example, allows Jet to significantly expand its reach in the US. Passengers can buy tickets on Jet for onward flights on United Airways from London to Chicago, San Francisco, Los Angeles, Washington, Denver and from Hong Kong to Chicago and San Francisco, besides 38 other destinations within the US.

Jet also wants to expand its international operations to more destinations such as Rome and Paris, said a second ministry official who also sought anonymity. Those permissions have also been put on hold at the moment, as destinations such as Paris are served by Air India already. An increase in capacity would hurt its interests.

The freeze on new code-share agreements may force Jet to re-examine its network expansion strategy, though an aviation analyst said Jet?s network has only few gaps left when it comes to covering various parts of the world.

?Latin America and the Pacific seem the two obvious areas,? said London-based aerospace analyst Saj Ahmad.

Already this year, Jet connected Africa to its network with a new flight from Mumbai to Johannesburg and a code-sharing alliance with Kenya Airways, both regions with significant Indian populations.
Aug 25th 2010 00:20