Several low-cost airlines from Japan to Australia have joined together to form the Value Alliance.
The alliance is made up of Tigerair Australia and Singapore, Japanese Vanilla Air, Thailand-based NokScoot and Nok Air, South Korean Jeju Air, Philippian Cebu Pacific Air and Cebgo, and Singapore-based airline Scoot.
The alliance will offer flights to more than 160 destinations with a fleet of 175 aircraft, and customers will be able to book flights with any of the eight carries through one website.
About a dozen low-cost airlines began operation in the Asia-Pacific region over the past decade.
“With so many competitors in the market, some are going to suffer,” David Miles, head of advisory services at Ambidji Group, a Melbourne-based aviation consultancy, told Japan Times. “A merger usually comes when one or more parties are struggling and they realize they need help.”
Campbell Wilson, chief executive Scoot, told CNBC that lower prices were a possibility with the alliance if the new traffic "increase...load factors"
"It is obviously an attempt by smaller low-cost carriers to respond to larger airlines,” Brendan Sobie, a Singapore-based analyst at the CAPA Centre for Aviation, told Japan Times. “Even if the incremental gain is relatively small initially, it’s still a good ploy to just get together and try to improve your distribution and brand awareness, and get some incremental traffic.”
