In 2016, seven low-cost carriers in the Asia Pacific region were champions in their home markets but faced impediments to growth — internally by virtue of structure, and externally from larger regional players.
Nok Air had Thailand covered but needed more feeder traffic. Scoot had a solid network from its Singapore hub but limited service to smaller markets. Vanilla Air of Japan sought a growth accelerator. Cebu Pacific in the Philippines had an expansive network serving international destinations in the Asia Pacific region but only to major airports, with little to no secondary or tertiary markets. Jeju Air had a lock the busiest air route in the world — between Jeju and Gimpo, serving 13 million passengers every year — but was vulnerable to larger regional players beyond its home market.
These airlines decided there was strength in numbers and wanted to cooperate, but struggled against daunting obstacles. Each had different classes of service with different pricing structures and thresholds for baggage, varied ancillary products — not to mention different service languages, currencies, local market rules and regulations, tax structures, and payment restrictions. These obstacles cannot be underestimated. There are major airline alliances that still can't sell seats on each other's planes even after decades of cooperation.
Enter Air Black Box, which had been working on a completely new type of air travel reservation system connecting disparate airline reservation systems to create viable itineraries and sell all products for all carriers in a unified, cohesive marketplace. The airlines were impressed, and decided to create a joint venture with Air Black Box, headquartered in Singapore.
After a year of development, the Value Alliance is up and running, and the largest low-cost airline alliance in the world. Not only is the Alliance's web portal powered by Air Black Box software, it's been wholly credited with making the alliance possible. For airlines, it means more seats and ancillaries sold and more revenue. For passengers, it means easy access to a reservation system that can automatically assemble a viable itinerary from almost any point in the Asia Pacific region to any other point, all at low cost and with a service guarantee that protects the passenger and their trip in its entirety.
As with all new development, the implementation came with its share of frustrations. Air Black Box and its airline partners have had to make adjustments and changes along the way. Air Black Box recently added support for two of the major flight metasearch companies and it's integrating new solutions to promote and sell deals and boost online visibility. The mark of success for us is not just providing a technical solution, but also how well we've been able to adapt and adjust to stakeholders' growing expertise in building a successful alliance in a highly fluid and dynamic marketplace.
One year after deciding to create the Value Alliance, its participating airlines — Cebu Pacific, Cebgo, Scoot, Nok Air, NokScoot, Vanilla Air, Jeju Air — offer comprehensive service to approximately 50 million passengers traveling to more than 160 destinations throughout Asia Pacific, the most dynamic and populous air travel market in the world. Yes, it works.