This week eight Asian low-cost carriers — Singapore's Scoot and Tigerair, Tigerair Australia, Cebu Pacific in the Philippines, Thailand's Nok Air and NokScoot, Jeju Air in South Korea and Vanilla Air in Japan — announced that they were forming the Value Alliance. This new airline alliance will link access to 160 destinations in Australia, South-east Asia and North Asia.
In other words the low-costs have created their own version of an airline alliance. Being in one group will mean one channel for booking journeys with any one of the members as well as the ability to book more than one of the carriers on the same itinerary. The new Far Eastern group's website is also set up to enable the purchase of ancillaries such as seat selection and on-board refreshments and meals at the time of booking.
Members of the Value Alliance believe this will put them in a position to compete with larger low-cost carriers in the region such as AirAsia.
European airlines will no doubt be watching developments closely. And given that low-cost carriers are now an integral part of short-haul travel in Europe, so too will corporate travel managers.
At present the low costs for the most part are on their own different platforms and also, in some cases, a "lite" membership of the GDS. Parent companies may be prominent members of some of the airline alliances but the status of their low-cost subsidiaries is less clear. For example, Vueling and Iberia Express are both owned by IAG but only airberlin, British Airways, Finnair and Iberia are European members of the oneworld alliance. HOP! is owned by Air France, a member of SkyTeam, but it is only an affiliate and Eurowings is owned by Lufthansa Group but it is not a member of the Star Alliance. Many other European low-cost carriers are independently owned and not strategically allied.
The possibility of carriers such as Ryanair, easyJet, Norwegian and WizzAir joining forces in an alliance committed to marketing and selling each other's flights and services will be an attractive proposition for any travel manager wanting to put travellers on a trip comprising segments on more than one of the member airlines. Being able to book all the low-costs, and any desired ancillaries, on one channel and one itinerary means convenience for the traveller — all boarding cards at the beginning of the journey, luggage checked through to final destination, etc — as well as the corporate buyer who can get all data including the spend on any extras such as, say, in-air WiFi as well as the base fare in one place.
And, if nothing more, comparison shopping between the total cost of using a no-frills carrier and the total cost of a traditional airline to travel between the same city pair for the same services will be more transparent and allow easier decision-making.
How far behind can lounges and frequent flyer points be?