Air India reportedly suspects Lufthansa as one of the reasons it was denied entry into the Star Alliance (Financial Express/Business Standard, 05-Aug-2011). Air India had reportedly previously expressed concerns in Dec-2010 over Lufthansa, its mentor in its efforts to join the alliance, attaching certain riders to its membership, with these rides subsequency approved by the alliance in Mar-2011. One of these riders reportedly involved Air India providing unambiguous support for Jet Airways' entry into the alliance. Meanwhile, Air India has requested the Civil Aviation Ministry facilitate compensation from the Star Alliance. The carrier has invested between USD5 million and USD10 million to meet the minimum requirement for joining the alliance. Air India and Lufthansa entered a bilateral partnership in 2002 and now operate more than 300 joint codeshare services. Air India has said the enhanced bilateral opportunities extended to Lufthansa should be reviewed by the government. It has communicated to the Ministry it had supported the exchange of additional traffic rights for Lufthansa as part of an understanding that included the airline’s support to its entry into Star Alliance.
Air India suspects Lufthansa as being behind denied entry into Star: reports
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Lufthansa CEO Carsten Spohr is seeking new growth platforms that sidestep the flagship business' uncompromising unions who would seemingly prefer a status quo that exists only in memory. Their support will be necessary if the partnership is to work and grow. Then Lufthansa, which has rallied the Star Alliance and JV partners against Gulf airlines, will need to explain its change of heart. For now Lufthansa will not partner on Etihad's beyond-Abu Dhabi network, a move that would embrace the fundamental business plan of Etihad and peers. That upside remains a matter for speculation.