If the partnership is approved, Flying Returns members of AI will be able to accrue mileage while travelling on Continental Airlines as well as redeem mileage for tickets on Continental and vice-versa. On the international front, AI is pitted against airlines such as Emirates, Lufthansa and British Airways, among others
Air India (AI) is in talks with US-based Continental Airlines to enter into a frequent-flyer programme (FFP) partnership with the carrier. If the partnership is approved, Flying Returns members of AI will be able to accrue mileage while travelling on Continental Airlines as well as redeem mileage for tickets on Continental and vice-versa.
Arvind Jadhav, chairman and managing director, AI, told FE, "We are in talks with Continental Airlines for the FFP, but it will take some time for the agreement to happen because some formalities need to be taken care of."
Partnering Continental could help the public sector airline since the environment currently is highly competitive. Earning miles on one carrier and burning them on another is a global phenomenon and carriers in Europe, US and even the Gulf region have partnered with international carriers to enhance their FFP portfolio and earn more passengers.
On the international front, AI is pitted against much powerful international airlines such as Emirates, Lufthansa and British Airways, among others. These airlines offer good connectivity to the US and Europe. Enhancing FFP partnerships with global carriers seems viable for AI wherein it can offer value added services to its passengers. Currently, no other airline in India is part of any international alliances except AI, which has joined Star Alliance in December 2007 but will officials make an entry intothealliancebymid2010.AIisalready partnering with Lufthansa and Singapore Airlines in its FFP programme. Says, Kiran Yadav, aviation analyst and director of Aerobiz International, "AI is at a critical phase. Making the right choice on its business model has lots to do with the carrier's ability to enhance passenger traffic by offering more value." He further added that entering into the FFP with a right kind of an airline would help AI enhance its passenger base in the US and back home. Continental can reciprocate its rights and do more business in the FFP by getting passengers for onward travel in India on AI's wide domestic network. AI has partnered the airline in a bid to cash in on its network.
Continental flies to 200 cities beyond New York and AI passengers can have the advantage for onward travel from New York.
"In 2009, nearly 2 lakh visas were issued for the India-US sector. Also, there are 3.5 million Indians settled in the US, of which a decent percentage flies to India annually," added Subhash Goyal, chairman, STIC Travel Group. According to other travel agents, AI has an above 50% market share on the India-US sector. AI flies to Chicago, Los Angeles and New York .
Worldwide, there has been a 60% increase in frequent-flyer miles accumulated worldwide in 2009 as compared to 14 trillion miles with a value of $700 billion in2005,say industry watchers.
The primary method of obtaining points in a frequent flyer program is to fly with the associated airline. Most airlines reward travellers with a specific number of points based on the distance traveled (suchas1pointpermileflown).
AI, which has posted losses of Rs 5,450 crore in FY08-09, is looking at avenues to shore up its revenues and innovate newer business models that can better its load factors. Last year, the carrier announced a revival plan that can help turnaround the carrier in three year's time.
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