Two founding members of the Value Alliance – Vanilla Air under ANA Holdings, and Cebu Pacific – are now equal (15% each) shareholders alongside Scoot and Nok Airlines of Air Black Box (ABB) Asia Pacific, the joint venture responsible for making the Value Alliance a reality.
The remaining equity is held by ABB’s majority investor VaultPAD Ventures, a US-based private airline travel and tourism venture accelerator.
With more alliance members now also shareholders of ABB Asia Pacific, this signals a continued desire and foothold by the LCCs to retain and gain further control over their sales and distribution capabilities.
The Value Alliance, comprising budget carriers Cebu Pacific, Jeju Air, Nok Air, NokScoot, Scoot, Tigerair Singapore, Tigerair Australia and Vanilla Air, formed the partnership earlier in May to enable direct interline ticket and ancillary sales among member airlines in one booking, a feat made possible using ABB’s platform.
The distribution solution provided by ABB, the world’s first multi-carrier interlining and booking system, remains the only cloud-based tool capable of doing so and the company has a patent pending for the technology they developed.
Immediate reactions to the formation of the LCC-only alliance were huge, with many questioning the relevancy of more traditional distribution channels such as GDSs.
But Mildred Cheong, general manager of ABB Asia Pacific assures that there will always be a market for the personalised services that travel agents provide. What the Value Alliance offers is an enhancement of the direct sales capabilities of LCCs.
To that end, the alliance is more of a competition for OTAs as its membership grows, and plans for expansion are already in the works, revealed Cheong.
“We are in talks with some airlines at the moment, and while I can’t reveal who they are, you can see where the alliance’s coverage lacks right now geographically,” she said, adding that markets like China, India, Vietnam and Indonesia are prime targets.
She adds that beyond just an increment in alliance members, the technology that ABB provides also allows for expansion in terms of bilateral interline partnerships.
As an example, this could mean Scoot being able to allow interline transactions with a full-service carrier from Europe, that doesn’t belong to the Value Alliance, from its own website.
The benefits of interlining, as opposed to joint ventures or codeshares, is the ability for airlines to be able to cross-merchandise their products without compromising on their brand integrity, asserts Cheong.
She adds that when the technology of all current eight members of the Value Alliance is fully integrated with the ABB platform in 1Q2017, a major push by the LCCs can be expected to happen.