An Alliance for the Low Cost Carriers?

Apparently the budget carriers are now moving towards becoming more like the legacy carriers as one of the first alliance for low cost carriers (LCC) are formed recently. Billed as the formation of a network amongst ‘Asia Pacific’s Best Value Airlines’ to bring ‘more choice for greater travel’, Value Alliance comprises initially of the following airlines: Cebu Pacific, Jeju Air, Nok, NokScoot, Scoot, Tigerair Singapore, Tigerair Australia and Vanilla Air.

From the website, the alliance members would fly to more than 160 destinations from 17 airport hubs and is expected to cover a third of the globe with a focus on travel within Australia, North Asia and South East Asia. Acoording to statistics, the airlines caters to more than 47 million passengers through a fleet of 176 aircraft in 2015. Below would be a route network for the Value Alliance.

Value Alliance Route Map
Value Alliance Route Map. Image from Value Alliance’s website

Motivations

While I do not think the Value Alliance was created to take on the large global alliances of Star Alliance, SkyTeam or oneworld, it was created to allow for easier reservations of tickets for flights within Australia, North Asia and South East Asia by passengers seeking low cost air travel. This is because these smaller regional airlines might not be as well known as individually they have less fleet than the legacy carriers.

More importantly, I view this alliance being created to counter the might of Air Asia within this 3 region. In fact Air Asia, being the largest low cost carrier in Asia, is significantly absent in this grouping. If you look from Air Asia’s route map, many overlaps with the network in Value Alliance route map.

Air Asia Network
Air Asia Route Map. Image obtained from Air Asia’s website

In fact, Air Asia promotes itself as flying to ‘121 destinations from 16 hubs in Malaysia, Thailand, Indonesia and the Philippines’. In its latest operational statistics, the Air Asia group has 171 aircraft with 170 operating airplanes. Combined the figure is indeed very similar to what is offered by the Value Alliance. No guessing on who this alliance was created to counter then.

Implications for Passengers

What the Value Alliance does is indeed offer more convenience and choices as passengers now can book more tickets and connections via any one of the Alliance member’s websites. The opening up of more travel possibilities will end up being better for travellers and this competition should make low cost carriers more competitive in nature.

Jeju Air at Incheon
Jeju Air at Incheon

After all, this Alliance formation might just allow me to fly with some of the lesser know airlines as I am not that keen to fly with Air Asia no matter how cheap they are after a bad customer service experience with them.

Scoot 777-200ER
Scoot 777-200ER at Changi
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