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Star dumped AI after pilots' strike

The 58-day strike by pilots of ailing national carrier Air India (AI) proved very costly to the airline's reputation and virtually sealed the decision by Star Alliance not to proceed with its membership, aviation consultancy firm Centre for Asia Pacific Aviation (CAPA) has said in a research report.

india Updated: Aug 27, 2012 23:16 IST
HT Correspondent

The 58-day strike by pilots of ailing national carrier Air India (AI) proved very costly to the airline's reputation and virtually sealed the decision by Star Alliance not to proceed with its membership, aviation consultancy firm Centre for Asia Pacific Aviation (CAPA) has said in a research report.

AI pilots, unhappy with the management's decision to allow erstwhile Indian Airlines (IA) pilots' for Dreamliner training, had struck work from May 7. The strike had paralysed AI's international operations and had led to a loss of Rs 600 crore.

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Star Alliance, the world's largest airline grouping, formed in 1997, consists of 27 member airlines. It includes Lufthansa, Singapore Airlines, Air China, US Airways among others.

"AI's domestic gross revenue per passenger increased by 46% in Q1 resulting in topline growth of $80 million, despite the impact of the pilots' strike. Based on CAPA estimates, AI's average gross passenger revenue was the highest in the industry at Rs 5,655. As a result, domestic operations showed significant improvement and may have ended the quarter with a small surplus at the operating level," the CAPA report said.

If AI has a chance, CAPA report says, it is now, but it needs a board and management that can seize the initiative.

"For the first time in several years, AI's domestic performance is headed in a positive direction, which could become a trigger for an overall turnaround if the situation is capitalised," CAPA noted.