Tigerair Australia (and seven other low cost carriers) have just announced the Value Alliance to give them the market clout and network reach to take on the major trans border Asia Pacific LCC franchises of AirAsia and Jetstar.
Make that without spending billions of anything on new jets and trying to cut each other’s throats, but at risk of their own, in the process.
It consists of Virgin Australia’s Tigerair operation, Singapore Airline’s Tigerair head franchise and its wide body low cost 787 operation, Scoot, Cebu Pacific (Philippines), Nok Air, and NokScoot (Thailand), Vanilla Air (Japan) and Jeju Air (South Korea).
In some cases there are overlapping ownerships, and there are obvious gaps in the maps including China, Taiwan, Vietnam, Indonesia, Malaysia and India compared to AirAsia and Jetstar.
But the Value Alliance members hold a combined significant presence in 17 hub airports and carry 47 million passengers a year in what is a fast growing market for low fare air travel and it might obviously grow in numbers of airlines and combined network reach.
The arrangements to collectively sell each other’s products (including bookable ancillaries like refreshments, checked baggage, roomier seats, priority boarding and other extras) are in the process of being rolled out.
Put together the branded networks of each Value Alliance Member mean multi-stop itineraries involving any of them can be booked on a single visit to any of their booking sites. Delivering on these claims will be obviously critical to success, given the number of risks the different airports and borders will pose to reliability.
The combined route map shown at the top of the post is also strongly Singapore-centric, reflecting the long term plan by Singapore to leverage low cost travel to grow its tourism industry and reinvigorate traffic flows through its Changi hub at a time when it was being increasingly bypassed by non-stop flights into the PRC and losing some of its shine as both a business centre and cross roads for SE Asia.
Those objectives made it easy for Singapore to accommodate the ambitions Qantas had for its Singapore based Jetstar Asia franchise more than 11 years ago. That same long game has now fostered the formation of the Value Alliance, and added more value to Virgin Australia’s ownership of the local Tigerair franchise.
It’s a game that will be played for a long time to come.