IATA, Star Alliance anxious about AI privatisation plan

Global airlines' bodies have expressed concern over the debt-ridden Air India's disinvestment or privatisation, saying such a move should not "distort" the national carrier's competitiveness or affect its alliance with global players.

International Air Transport Association (IATA) chief Alexandre de Juniac, in an interview to PTI, parried questions on the proposals to privatise Air India, while observing that this was the second time such an announcement had been made.

Maintaining that "we don't have a position on that (privatisation)", de Juniac said "the government can do whatever they like with the airline, provided they do something which is competitive or competition-oriented. If there is no distortion in the market, it's okay. Then do it."

While the IATA has said that the national carrier's privatisation process should not "distort" competitiveness in the aviation market, the Star Alliance, of which Air India is a prime member, has said the ownership and control should not affect its network or lead to the "backdoor entry" of an airline into the grouping.

Talking to PTI on the issue, Star Alliance CEO Jeffrey Goh said, "if the ownership and effective control of Air India is within the Star Alliance family, we don't have a problem with that."

"If, however, the ownership and effective control is outside Star Alliance, we will need to review the situation to see whether it is still compatible with our strategy. Because if particularly it's an airline (which takes over Air India), we don't want the acquisition of one of our members becoming a back door entry into Star Alliance," Goh said.

Star Alliance is the biggest airline grouping, whose 28 member airlines serve 1,300 destinations with about 5,000 aircraft flying over 650 million passengers per year.

Besides Air India, its members include Lufthansa, Singapore Airlines, United, Air China, Air Canada, ANA, Swiss and South African Airways.

Goh said the national carrier had big challenges, not only in terms of a large organisation, but also "lots of financing or funding challenges, that is quite high, $8 billion."