The New Superpower – Value Alliance

Eight Low Cost Carriers (LCC’s) – otherwise known as “Budget Airlines” – from the Asia-Pacific region have today announced the formation of a new and revolutionary strategic alliance, all with the intent of driving tourism and lowering prices.

Branded with a simple and elegant logo (that goes quite against their member airlines’ marketing schemes), “Value Alliance” was announced on Monday May 16, 2016 in Singapore, with the intent of commencing services in the near future.

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Combining Cebu Pacific, Jeju Air, NokAir, NokScoot, Scoot, Tigerair Australia,Tigerair Singapore and Vanilla Air, the new alliance is sure to be a dominant and fearsome super-power in the already cut-throat LCC market in Asia.

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Photo: @FlyScoot via Instagram

Notably, Air Asia and Jetstar are excluded from this little group, as the two currently have very large market shares. The alliance hopes to use their size to dramatically reduce the dominance of these two competitors.

Many of these carriers are, in fact, already in partnership. NokScoot, Scoot, Tigerair Australia and Tigerair Singapore are all affiliates of the Singapore Airlines Group, and already share bookings and itineraries. The new move will, however, consolidate such interlining even further.

It’s very interesting to note that this is not the first LCC alliance. In January of this year, the U-Fly Alliance was formed, joining Hong Kong Express, Lucky Air, Urumqi Air and West Air. These carriers are far smaller and less heard of than those in the Value Alliance, and U-Fly covers a far smaller area, with significant focus on China, and extensions to South Korea, Japan and Vietnam. All four airlines are subsidiaries of the Chinese conglomerate, “HNA Group”, and this partnership simply firms up their existing ties, and adds in extra benefits.

Ufly_alliance_logo Screen Shot 2016-05-16 at 9.57.22 PMPhotos: U-Fly Alliance

Whilst no frequent-flyer system has been proposed, the partnership is focusing on streamlining the booking process and providing lower, more consolidated fares. Using Air Black Box‘s distribution systems and IT networks, passengers will be able to use a single airline’s site to view routes, prices and options across the entire Value Alliance network. They are then able to complete a booking across several airlines, and select seats, meals and other additions, all in a single, simple booking flow, resulting in one consolidated itinerary.

The alliance is proposed to reduce airfares by up to 30%, partly through Air Black Box’s comparison features that will display the lowest available prices for each airline within the group.

Coordinating routes will give passengers access to 176 aircraft flying to 160 destinations, covering one-third of the globe. It is intent on increasing inbound tourism, especially by bringing Australian travellers to hidden corners of the Asian continent. The network extends all the way from Australia, through South, North and Central Asia, and even up into the Middle East, providing millions access to a range of exotic destinations.

scoot network_TZ_Points                                                           Photo and Header Logo: Value Alliance

This is sure to cause a shake-up in the LCC market, prompting fierce price-wars. All-in-all, this is a very beneficial situation for the member airlines, and of course, the consumers.

Click here to visit the intermediary Value Alliance website.

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