Eight budget airlines, including Tigerair Australia and Singapore-based Scoot, have formed a new alliance designed to help them better compete against pan-Asian low-cost carrier groups like Jetstar, AirAsia and Lion Air.
The new Value Alliance, launched on Monday, will allow customers to view, select and book the best-available fares directly from the website of all airline members to create itineraries throughout the Asia-Pacific region.
Tigerair Singapore, Thailand's Nok Air and NokScoot, Japan's Vanilla Air, Korea's Jeju Air and Cebu Pacific of the Philippines are founding members alongside Tigerair Australia and Scoot. The carriers collectively serve more than 160 destinations, primarily in the Asia-Pacific region.
"Coming together as an alliance we can leverage each other's brand recognition in our respective home markets and leverage each other's distribution in our home markets," Scoot chief executive Campbell Wilson told Fairfax Media. "We can present to them itineraries that include sectors with all of our partners."
New technology developed by Air Black Box will also allow the partners to sell the best available fares from alliance members on each website and to book baggage allowances, meals, insurance and other add-ons. For example, if Scoot offers a $10 promotional fare for booking on its own website, it will appear on the Tigerair Australia website as well.
Cebu Pacific chief executive Lance Gokongwei said the Value Alliance was a clear example of how low-cost carriers could accomplish more by working together than they do individually.
Tigerair Australia will be part of the Value Alliance.
Tigerair Australia will be part of the Value Alliance.
Scoot, Nok Air and NokScoot have already introduced the booking technology, with the other carriers to follow within the next six months.
Mr Wilson said the alliance, which has been in the works for 18 months, could be expanded in the future to include a frequent flyer program but there were no plans to do so at this stage.
"We want to take it step by step," he said. "We want to pick the low-hanging fruits and see where there are other benefits."
Mr Wilson said it could evolve to include other low-cost carriers that fly around or into Asia, including those from Europe. Members might also consider applying to competition regulators for approvals that allow them to cooperate on their network and scheduling, as Scoot and Tigerair Singapore already do.
Scoot, which is wholly owned by Singapore Airlines, last week reported its first-ever annual profit of $S28 million ($27.9 million), a major turnaround from the $S67 million loss the prior financial year.
"[Our first profit] is a great milestone to have hit," he said. "It is contributed to in part by the efficiency of the 787 aircraft and the lower fuel price."
Scoot grew its capacity by 29.1 per cent during the year, adding new destinations like Melbourne, and filled a higher percentage of seats yet it managed to keep average fare prices steady.
"The Australian routes had a very strong summer season," Mr Wilson said of flights to Melbourne, Sydney, Perth and the Gold Coast. "But it is still a competitively challenging market and a seasonal market."
He said more than 20 per cent of Scoot's revenue now came from selling add-ons like baggage, meals and in-flight Wi-Fi and the airline is continuing to develop new sales opportunities.
"What we have just released is what we call a social internet package," he said. "It is a much cheaper internet product that is focused on people using social media and Facebook."
(culled from www.smh.com.au)
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