Shanghai confirmed as Chinese Star

^{Leithen Francis / Shanghai}

Star also anticipates that towards year-end it will have invited an Indian carrier – either Air India or Jet Airways – to join the alliance.

In mid-May Shanghai Airlines and Star held a ceremony in Shanghai in which the carrier formally accepted an invitation to join the alliance. It will take Shanghai Airlines about 12 months to join, during which time it will fulfil the alliance’s minimum requirements, says Star chief executive Jaan Albrecht, adding that this timeframe is the norm for airlines joining.

Beijing-based Air China is also preparing to join the alliance. Air China has taken longer to get to the point where it can accept such an invitation because it is the country’s flag carrier so it needs more formal approval from the Civil Aviation Administration of China, says Albrecht.

Bringing both Shanghai Airlines and Air China on board is important because Star is following a “two-hub strategy in China”, he says. The timing of the announcement was also important because Star wanted to send a strong signal to the Shanghai Airport Authority that Shanghai Airlines and other Star carriers at Shanghai Pudong International airport need to have gates in Terminal Two located close to each other. This terminal is under construction and due to open in 2008 before that year’s Beijing Olympics.

“We understand [the Shanghai Airport Authority] will be ready to make an announcement on space allocation in the summer of 2006,” says Albrecht. Being in the new terminal is important because it is designed to handle Airbus A380s, plus it promises to allow for easier connections between international and domestic flights, he adds.

Shanghai Airlines is primarily a domestic carrier, but wanted to join Star because it would allow it to quickly expand internationally through codeshares with foreign carriers. Today it lacks the aircraft to operate passenger services to the USA, for example, so it is codesharing on the services of United Airlines. It also has no passenger services of its own to Europe, but codeshares with Lufthansa.

Zhou Chi, chairman of Shanghai Airlines, says the carrier is looking at operating its Boeing 767-300ERs to Europe but its major international expansion of passenger services will wait until 2008 when it starts taking delivery of the 787s it has on order.

While Star is set on getting Shanghai Airlines and Air China to cover the burgeoning China market, it has set its sights on luring one of two airline groups in India. Albrecht says it is talking to privately owned Jet Airways, which is acquiring local carrier Air Sahara, and Air India, which might be merging with Indian Airlines, another state-owned carrier.

“We are evaluating and are in the final phase,” he says. “At the end of this year we will be in some place in India to make an announcement of invitation of an airline to join the alliance,” says Albrecht. ■

Source: Airline Business