India's two biggest airlines, the government-owned Air India (nominally run under National Aviation Co of India Ltd) and the country's largest private carrier Jet Airways (India) Ltd, are close to code-sharing agreements with foreign carriers to carry passengers, especially on the busy Mumbai-London leg.
According to an unconfirmed report on Livemint, Jet Airways will enter into a code-sharing alliance with Virgin Atlantic, allowing it to share passengers with its partner.
Amid the general slowdown that has particularly hurt the airline industry, Atlantic Airways Ltd had pulled out its non-stop flight earlier this month on the Mumbai-London route, while Air India last year cancelled the London-New York leg of a Mumbai flight to the US through London.
But since the traffic on these routes remains relatively high, Jet Airways is now entering into a code-sharing alliance with Virgin Atlantic on the Mumbai-London sector for the two daily flights it runs from Mumbai, Livemint quoted an unnamed senior government official as saying.
Code-sharing essentially means that passengers can fly to their destination on one ticket even if it involves changing airlines en route. Passengers can thus check in baggage to their final destination and earn air miles on one or both carriers.
Air India, on the other hand, has got a clearance for a code-sharing agreement with Kuwait Airways from the civil aviation ministry, Livemint reported an anonymous company executive as saying.
According to another unconfirmed report carried by DNA, Jet Airways may be preparing for a stake sale to Germany's Lufthansa, which could lead to an eventual takeover as the Airline struggles with low volumes.
Plunging domestic air traffic and stiff competition have forced full-service carriers to drop their fares to the levels of budget airlines, severely impairing their cash flows. They are also missing their payments to oil marketing companies.
According to DNA, numerous meetings between Jet Airways and Lufthansa have been held in Germany in the past few months, but none in India to ensure that the news is not disclosed prematurely.
While present rules do not permit foreign direct investment in an Indian airline by a non-Indian carrier, it is likely that once the new government takes over on 2 June, FDI norms will be considered.
Civil aviation minister Praful Patel had said earlier this year that the government is looking at allowing foreign airlines to buy up to a 25 per cent stake in domestic carriers. Last year, Patel would only say that ''The proposal is still under examination.''