Air India: Shining Star or Black Hole?

Air India has been in the news a fair amount the past couple weeks, doing their best to test the theory that any publicity is good publicity. It is hard to tell which way that will play out for them at this point, but they’re definitely trying it would seem.

Shining Star (Alliance)

First up was their announcement that they’re finally ready to join Star Alliance. The initial invitation to join the alliance was extended in 2007, a long, long time in the world of airline alliances. Alas, the company struggled with IT issues and other integration problems and has seen their proposed join date postponed time and again. But as of May 2011 they believe they’ve finally got all the pieces in place to make that the leap into the alliance.

There is still no specific date set for the airline to join up and it is not entirely clear that the IT issues that are supposedly resolved were the only stumbling block. But this development certainly bodes well for the airline eventually actually making it into the alliance. Is that good for passengers? Sure. More options is always better. And this will certainly open up a significant number of smaller destinations within India for both earning and redemption. But that doesn’t mean I’ll be going out of my way to fly with them any time soon.

Black Hole

Speaking of opening up more, smaller destinations in India, this past week that was actually a bit of a problem for the carrier. It seems that a number of flights were cancelled when the airline was unable to acquire fuel for its aircraft. The fuel issues, isolated at a few airports in the southern part of the country, were apparently caused by the airline’s failure to pay its bills for previous fuel deliveries. Apparently the state-owned fuel companies are refusing to extend credit to the carrier for said purchases.

Moreover, the response from an airline spokesman who refused to be named is a bit disconcerting.

This problem is being resolved. We expect to pay for our fuel and also to obtain some assistance from the aviation ministry.

The first part of the quote certainly makes sense but the second part – expecting assistance from the government – is certainly worrisome if you’re expecting the company to still be operating in the near future. If they’re talking about needing government support then that would suggest they cannot survive on their own. That’s a very precarious position to be in. Certainly the 10-day pilot strike earlier in the month didn’t help the situation either.

So which is it, Shining Star or Black Hole?

The optimist in me wants to believe that they can turn things around and actually start to make money. Maybe being a part of the global alliance will push things in that direction and get them the interline traffic they need for that to happen. But given the current competition they face both inside their borders and on the international stage it doesn’t seem particularly likely.