On May 16th, Vanilla Air [JW/VNL], together with LCCs Cebu Air (d.b.a. Cebu Pacific) [5J/CEB] including subsidiary Cebgo [DG/SRQ], Jeju Air [7C/JJA], Nok Airlines (d.b.a. Nok Air) [DD/NOK], NokScoot Airlines [XW/NCT], Scoot [TZ/SCO], Tiger Airways Australia (d.b.a. Tigerair Australia) [TT/TGW], and Tiger Airways Singapore (d.b.a. Tigerair) [TR/TGW], announced the creation of Value Alliance. The founding members currently operate a collective fleet of 176 aircraft across the Asia Pacific region and serve over 160 destinations, carrying 47 million passengers in 2015.
The partnership enables customers to book flights from any of the eight airlines' websites in a single transaction through technology developed by Air Black Box (ABB). Travelers will also be able to choose ancillary services including seat selection, meals, and check-in baggage for flights from different airlines in a single itinerary. ABB’s Air Connection Engine (ACE) platform has filed for NDC Certification with IATA and is expected to complete full certification soon.
However, the cooperation will be limited to enhancing sales and ticket distribution among members, at least initially, unlike the comprehensive alliances of legacy carriers such as Oneworld, Skyteam, and Star, which go far as offering mileage transfers, joint marketing, standardizing service and quality, and coordinating schedules and sharing revenues where anti-trust immunity (ATI) has been granted. At this time, Value seems to be largely an experiment to better compete with the likes of LCC groups AirAsia and Jetstar, and to a lesser extent Lion Air, which have gained network scale by having subsidiaries in multiple nations and marketing them under a single brand and website.
Value becomes only the second LCC grouping of its kind after U-FLY Alliance, which was formed in January and includes Hong Kong Express Airways (d.b.a. HK Express) [UO/HKE], Lucky Air [8L/LKE], Urumqi Air [UQ/CUH], and West Airlines (d.b.a. West Air) [PN/CHB], all HNA Group carriers. Both alliances are keen to court more members, though there are not many remaining in the region. VietJet Aviation [VJ/VJC] will likely go alone, with a strong and growing domestic home market along with a healthy aircraft orderbook. Also, the government, which controls Vietnam Airlines [VN/HVN] and indirectly owns Jetstar Pacific Airlines [BL/PIC], may not be comfortable in allowing them to forge international partnerships for now.
On another note, the exclusion of Tigerair Taiwan [IT/TTW] from Value is a further hint that its majority owner China Airlines [CI/CAL] is planning to buy Tigerair's 10% shareholding to take full control, which would likely result in the LCC re-branding and moving to a different reservations system. Also, Tigerair Taiwan competes with Scoot in the Taiwan – Singapore and Taiwan – Japan markets and with NokScoot in the Taiwan – Thailand market. However, some competition within the alliance seems inevitable as Vanilla prepares to launch Southeast Asia from a new Taipei/Taoyuan [TPE/RCTP] hub by year-end (Vanilla Air adds Kansai – Taipei, plans SE Asia in 4Q2016.).
Source: Vanilla Air, 2016 May 16th. (in Japanese)
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| Airbus A320-214(SL) JA07VA arrives at Narita. Vanilla Air took delivery of its ninth A320 on April 22nd and will receive two more during FY2016, with its fleet planned to reach 25 by FY2020. New President Katsuya Goto has mentioned the possibility of the A321neoLR, which would allow non-stop flights from Japan to Southeast Asia. (Photo: Ryosuke Yano) |
The partnership enables customers to book flights from any of the eight airlines' websites in a single transaction through technology developed by Air Black Box (ABB). Travelers will also be able to choose ancillary services including seat selection, meals, and check-in baggage for flights from different airlines in a single itinerary. ABB’s Air Connection Engine (ACE) platform has filed for NDC Certification with IATA and is expected to complete full certification soon.
However, the cooperation will be limited to enhancing sales and ticket distribution among members, at least initially, unlike the comprehensive alliances of legacy carriers such as Oneworld, Skyteam, and Star, which go far as offering mileage transfers, joint marketing, standardizing service and quality, and coordinating schedules and sharing revenues where anti-trust immunity (ATI) has been granted. At this time, Value seems to be largely an experiment to better compete with the likes of LCC groups AirAsia and Jetstar, and to a lesser extent Lion Air, which have gained network scale by having subsidiaries in multiple nations and marketing them under a single brand and website.
Value becomes only the second LCC grouping of its kind after U-FLY Alliance, which was formed in January and includes Hong Kong Express Airways (d.b.a. HK Express) [UO/HKE], Lucky Air [8L/LKE], Urumqi Air [UQ/CUH], and West Airlines (d.b.a. West Air) [PN/CHB], all HNA Group carriers. Both alliances are keen to court more members, though there are not many remaining in the region. VietJet Aviation [VJ/VJC] will likely go alone, with a strong and growing domestic home market along with a healthy aircraft orderbook. Also, the government, which controls Vietnam Airlines [VN/HVN] and indirectly owns Jetstar Pacific Airlines [BL/PIC], may not be comfortable in allowing them to forge international partnerships for now.
On another note, the exclusion of Tigerair Taiwan [IT/TTW] from Value is a further hint that its majority owner China Airlines [CI/CAL] is planning to buy Tigerair's 10% shareholding to take full control, which would likely result in the LCC re-branding and moving to a different reservations system. Also, Tigerair Taiwan competes with Scoot in the Taiwan – Singapore and Taiwan – Japan markets and with NokScoot in the Taiwan – Thailand market. However, some competition within the alliance seems inevitable as Vanilla prepares to launch Southeast Asia from a new Taipei/Taoyuan [TPE/RCTP] hub by year-end (Vanilla Air adds Kansai – Taipei, plans SE Asia in 4Q2016.).
Source: Vanilla Air, 2016 May 16th. (in Japanese)
