Air India and Star Alliance have restarted discussions, an indication that the carrier may be making headway in joining the alliance.
There has been "high level contact" between the two organisations recently, say sources close to the discussions. This is after talks were stopped for more than a year, when Air India suspended the carrier's integration with the alliance in August 2011 since it did not meet the minimum membership conditions.
Local media reports in India add that the loss-making flag carrier has contacted a majority of the 27 Star Alliance member carriers and received a "favourable response" to the carrier joining the group.
Star would only say that the integration of Air India remains on hold, and that India remains an important market in the alliance's long-term strategy. This includes having Indian carriers in its network.
In November 2012, Star's chief executive Mark Schwab revealed that it is in talks with Jet Airways and that the alliance wants to adopt a "two-carrier strategy" in India. He then said that formal discussions with Air India has not restarted.
"We understand that Jet Airways is seeking government approval to move forward with their alliance strategy," says a Star spokesman.
Jet's previous attempts to join Star were fruitless as the Indian government had been keen to have state-owned Air India be the first carrier from the country to join the alliance.