The civil aviation ministry may request a quick approval of state-owned Air India’s proposal for Rs 4,550 crore ($911 million) in equity and soft loans, of which Rs 1,000 crore ($200 million) will be set aside for upgrading IT.

However, Air India maintains that it only asked the government for equity infusion. Air India has plans to upgrade its IT systems and station offices globally to meet the standards of Star Alliance. It has plans to join Star Alliance, an international network of 17 airlines that connects 855 airports in 155 countries. Air India hopes that joining will improve its passenger yields through code sharing and interlining agreements. The move is expected to give the airlines an advantage over its competitors in the private sector.

Star Alliance has set a deadline of March 2009 to upgrade its IT network. Star Alliance includes Lufthansa, Singapore Airlines, Air Canada and United Airlines among its other members. The specialised teams at Air India, Star Alliance and its member carriers will be working on the integration process.

Air India’s domestic load factors declined 15 per cent in domestic load factors and 13 per cent in international travel due to increase in airfares and the economic crisis. It recorded a loss of Rs 2,000 crore ($401 million) in the current financial year. In addition, Air India recently announced fleet expansion of more than 100 aircraft, which is expected to help the airline gain better mileage in terms of global reach and services. X

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