Mumbai: Indian flag carrier Air India's holding company, the public sector National Aviation Co. of India Ltd, (NACIL) is reported to have short listed German aircraft maintenance company Lufthansa Technik AG, along with the US-based aviation consultant Simat Helliesen and Eichner Inc., as possible consultants who would be tasked with developing a network strategy and operational plan to help the airline optimize its fleet utilization and become a part of a global alliance of airlines.

Lufthansa Technik a leading independent provider of maintenance, repair and overhaul (MRO) for commercial aircraft, engines and components. Simat Helliesen & Eichner, Inc. (SH&E) is the leading aviation consulting firm dedicated to air transportation. 

Reports quoted NACIL sources as saying that Air India would embark on a new network strategy as per the recommendations of whichever of the three companies is selected as its consultant. The selected company would be tasked with doing a market analysis, including a seasonality analysis that will update market sizes and predict demand at various cities. 

Reports suggest that additionally, Lufthansa Technik or Simat Helliesen would also analyse the option of developing an aviation hub in India and / or abroad, and would make recommendations based on existing and potential traffic patterns. The project is said to have a time line of four months from the date of selection.

NACIL commanded a market share of around 18 per cent according data for August 2008 from the civil aviation ministry. The carrier is under pressure to improve its competitive edge now that the number two and three carriers, private sector airlines Jet Airways and Kingfisher Airlines, have come together in an operational alliance that seeks to manage their costs better. 

The two private sector carriers together command around 58.5 per cent of the market. Under their alliance, Jet and Kingfisher will buy jet fuel together, share infrastructure, and use a code-sharing agreement to reduce the number of flights on selected routes.

Reports quoted unnamed sources as saying that a fresh evaluation was needed for network planning and the integration of the former Indian Airlines with Air India, ahead of Air India getting ready to join an alliance of airlines sometime around the end of the year. 

Last week, German flag carrier Lufthansa said it would mentor Indian flag carrier Air India's moves to become a Star Alliance member. The Star Alliance is a global grouping of top airlines. (See: Lufthansa to mentor Air India's entry into the Star Alliance grouping)

NACIL recently teamed up with European aerospace giant, the European Aeronautic Defence and Space Company (EADS) in a joint venture to set up an aircraft Maintenance, Repair and Overhaul (MRO) centre at New Delhi's Indira Gandhi International Airport.  The proposed MRO centre will commence operations from early 2009 once it receives formal approval from the Government of India. (See: NACIL, EADS to set up a joint venture MRO centre in India)

NACIL is project to book around Rs2,000 crore in losses this financial year. Reports suggest that by joining the Star Alliance, Air India would be able to grow its international revenue by around three to four per cent in about a year, once it integrates with other members of the Star Alliance. 

To that end, Lufthansa Technik or Simat Helliesen, whichever of them is selected as its consultant for the project, would help Air India to formulate a new network strategy for NACIL's international operations in partnership with Star Alliance, and another for Air India Express, which presently has operations on regional international routes mainly into the Middle East, and has plans to start domestic operations in some time.  

The Star Alliance was established in 1997 as a global airline alliance that would allow customers global reach and a smooth travel experience. Overall, the Star Alliance network has over 18,100 daily flights to 975 destinations in 162 countries.