Impact Publications : MiceBTN_63
MICEBTN - May-JULY 2016 • Page 57 THE NEW eight-airline Asian low cost carrier (LCC) group ‘Value Alliance’ may not yet be top of mind for Australasian holidaymakers, but it – and other alliances - should rank highly for business travellers as well as meetings, incentives, confer- ence and exhibitions (MICE) delegates, writes Jack Handley. The eight Value Alliance airlines – cur- rently an invitation-only group – are Tige- rair Australia (owned by Virgin Australia), Cebu Pacific, Jeju Air, Nok Air, NokScoot, Scoot (owned by Singapore Airlines - SIA), Tigerair Singapore (also SIA) and Vanilla Air (owned by Japan’s ANA). The other major regional alliances are the Vanilla Alliance, based in the Indian Ocean and with Air Austral, Air Mauri- tius, Air Madagascar, Air Seychelles, and Int’Air Îles as members and China’s HNA, which promotes its own carriers HK Express, Lucky Air, Urumqi Air, and West Air under the U-FLY alliance. Missing from Value (and the other alliances) are Malaysia’s AirAsia, Indo- nesia’s LionAir, Australia’s Jetstar and partners and India’s IndiGo. On reflection, even if any of those miss- ing carriers had been invited to join Value, their fleet sizes could have influenced its direction and eventually could have seen the Value carriers dominated and taken over. That aside, Value Alliance and the other groups’ airlines individually and in com- bination all compete against members of ‘legacy carrier’ alliances oneworld (formed in 1999, now with 16 carriers including new member Aer Lingus), Star Alliance (formed in 1997, now with 27 members) and SkyTeam (formed in 2000 and with 20 members), which between Business and MICE travellers in Asia Pacific should expect to benefit from LCC alliances them serve about 3,300 destinations. The Value Alliance members’ attraction primarily is their Asia Pacific destinations ‘reach’ and their current 47-million-plus annual passenger totals, but the thinking behind the partnership goes much deeper and the secrecy ahead of its launch indicates that it has been in the planning stages for some time. Let’s look at some current, planned and potential benefits of flying with a Value Alliance member (a hint: Benefits are similar to those offered by legacy carrier alliances): 1 – Travellers can book any and all Value member flights through any value member web site. 2 – Customers can or will be able to benefit from seamless single-check-in for multiple leg and multiple carrier itineraries to (currently) 160 destinations. 3 – Customers will benefit from being able to book ancillaries, (extra baggage, meals, seat selection etc) on any airline in the group. 4 – Average fares could well be lower compared to alternative carriers/routings. 5 – The technology underpinning the booking capability will enable the mem- bers to develop frequent flier programs, plus mobile apps, partner programs and more. The benefits for business and MICE companies are legion. For Asia Pacific road warriors and their employers, the added destinations mean more flight and route flexibility, probably better fares, possibly lower overall hotel costs because of higher flight frequen- cies and certainly, more bargaining power with airlines, hotels and others. For the MICE industry, the above bene- fits also apply, but also cry out for group Value Alliance deals with car rental, hotel, coach, airport trans- fer firms and other tourism and travel firms in the various destinations, aiming for less complexity than is caused by hard-to co-ordinate airline connections. As MICEBTN mag- azine has reported in the past two years, a huge number of jets on order – worth many billions of dollars - are destined for Asian budget carriers’ fleets. Many commentators have voiced doubts that the market is capable of filling those planes. LCC airline failures and mergers have been predicted. But the Value Alliance is a potential game changer. Not only does it challenge legacy car- riers and other LCC competitors, it also says ‘we’ve thought about our competi- tion, about the market, about IT advances, about the future and about possible land- based partnerships with hotels and so on. We’ve been quiet, but now we’re ready to take it all on’. Will Value deliver? On face value, it might.