Tuesday, March 23, 2010

Air India Eyes Move From Frankfurt To Dublin


Aviation Daily Mar 23 , 2010 , p. 08
Neelam Mathews

Air India is sending a technical evaluation team to Dublin as part of its effort to move its European and U.S hub away from Frankfurt Airport in Germany.

This follows the visit of its senior management team to Dublin last month. The decision to shift from Frankfurt will be made this summer, according to a senior official. The carrier is also looking at partnering with Ireland’s national carrier Aer Lingus for connecting flights to Europe.

The decision of Air India to change its hub was first reported by The DAILY's sister publication, Aviation Week & Space Technology (Feb. 1). Copenhagen is believed to be another contender.

Dublin’s new Terminal 2 is due to open in November, and Air India is expected to be one of the first tenants of the Dublin Airports Authority, which is trying to cope with a fall in traffic.

“All our decisions need to consider cost effectiveness,” Air India Chairman and Managing Director Arvind Jadhav told The DAILY last month.

While economics is a major consideration, the Irish capital’s airport enablews U.S.-bound passengers to clear customs and immigration prior to arrival, thus avoiding long lines. This will be a major plus when AI makes it decision, a senior Irish official says.

Air India began operating to Frankfurt barely 10 months ago but is now concerned that the price of a new rate agreement it signed in December with airport operator Fraport is too high. Fraport will increase its charges on a progressive scale up to 12.5% in the next two years.

Lufthansa has been Air India’s sponsor for Star Alliance membership, a process that has been held up for two years as Air India completes an alignment of its information technology systems with Star’s system. A move to Dublin would be another drawback because Frankfurt is a main Star hub.

At Fraport, executives are equally at a loss to explain Air India’s long-term rationale. Ireland is geographically peripheral to Europe, says Ansgar Sickert, managing director of Fraport’s India office. Air India also will bear large costs in relocating, he adds. Aer Lingus code shares with United Airlines, British Airways and KLM for onward flights to the U.S. and Europe. JetBlue Airways signed a strategic partnership in 2008 that would enable booking between Ireland and more than 30 U.S. destinations.

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