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CAPA LCCs in North Asia 2017: A New Age of Cooperation?

22 Jun 2017

OSAKA - Loyalty Advantage attended the CAPA LCCs in North Asia 2017 conference organised by the Centre for Aviation last week, and one of the most interesting themes that came up repeatedly was that of cooperation.

 

Low-cost carriers (LCCs) are increasingly thinking beyond their owned and operated networks and adopting some of the strategies that have proliferated among full-service carriers in the last two decades. At various points in the conference, each of these strategies received some attention: interline, alliances, joint ventures, and equity partnerships.

 

Some of this was to be expected, given the presence on the panels of AirAsia, long a pioneer in cross-border joint ventures. But much of the discussion came from the other “single-country” carriers such as Vanilla Air, HK Express, and Vietjet.

 

Vanilla Air discussed both their participation in the Value Alliance and their potential to work with full-service carriers in other forms of interline partnership such as feed from long-haul full-service carriers.

 

HK Express confirmed that their U-Fly Alliance is beginning to see multi-segment, multi-airline itineraries sold through GDS distribution.

 

And Vietjet referred to their desire to interline with full-service carriers both to their east and west, positioning them as a key partner within Vietnam and Southeast Asia.

 

Even Spring Airlines, notoriously independent, hinted that cooperation with a long-haul LCC such as Norwegian Air in the medium-to-long term was under study. (Since Norwegian don’t fly to China, current connectivity would be somewhat limited).

 

From our work with low-cost carriers, this activity comes as no surprise to us. Carriers across the region have quietly been exploring ways to partner over the past several years. However, the public attention given to partnerships at the CAPA conference may be a sign that the pace of change is about to accelerate.

 

(Loyalty Advantage is involved in partnership development on the loyalty side through our Bridge platform, which enables carriers to set up quick and easy points cross-earning and -redemption partnerships with both low-cost and full-service carriers. For more information contact us.)

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