The members of the alliance are Singapore's Scoot and Tigerair, the Philippines' Cebu Pacific, South Korea’s Jeju Air, Thailand’s Nok Air and NokScoot, Tigerair Australia and Japan’s Vanilla Air. It excludes bigger budget carriers such as Malaysia’s AirAsia and Qantas Airways’ Jetstar.
Campbell Wilson, CEO of Scoot said that this alliance will increase the strength of the geographical reach of its members by using the strength of each partner’s website in its home market. In a single transaction, travellers can select seats, meals and baggage allowances across the websites.
Mr Wilson also added that there are no plans at this stage to incorporate deeper partnerships including cooperation across frequent flyer programmes, joint sales and marketing, and coordination on network and prices as they require regulatory approval.
This makes the Value Alliance not as extensive as the ones in the market, which include full-service carrier partnerships such as Star Alliance, Oneworld and SkyTeam. They feature extensive code-sharing agreements, access to a network of waiting lounges, and the ability to redeem points on partner flights.
Analysts say that the partnership is a reaction to cut-throat competition in a fast-growing travel market, which is putting pressure on margins of budget carriers and full service carriers alike. The Asia-Pacific is expected to see over 500 million visitors by 2020, making the region’s tourism industry the largest in the world.
Asian budget carriers are looking to take advantage of a travel boom in the region, placing orders for several hundred aircraft from Airbus Group SE and Boeing Co.
Boeing’s 2015 global market outlook showed Asian low-cost carriers generated average annual growth of 24.5 percent over the previous decade. By comparison, European low-cost carriers grew only by 13.4 percent. Boeing has forecasted 100 million new passengers entering the Asian market in the foreseeable future, creating demand in the next 20 years for 10,370 single-aisle planes such as Boeing’s 737 and Airbus’ A320.
