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8 Asian budget airlines strike up alliance

For now, the eight Asian budget carriers will focus on sales cooperation.

SINGAPORE -- A group of eight budget airlines based in Asia on Monday formed the world's largest alliance of low-cost carriers, hoping to broaden their customer base. The octet includes affiliates of legacy carriers Singapore Airlines, Thai Airways International and Japan's All Nippon Airways.

The Value Alliance, launched in Singapore, focuses on sales cooperation. Passengers will be able to book flights on any of the member airlines through a single carrier's website. The companies hope to capitalize on demand for "interlining" -- booking connections across different airlines.   

The alliance will offer "more destinations than any other [budget carrier] group," Cambell Wilson, CEO of Singapore's Scoot, said in a speech. 

The eight members are: Scoot and TigerAir, both of which are Singapore Airlines subsidiaries; Thai Airways' budget affiliate Nok Air; NokScoot, a joint venture between Nok Air and Scoot; Cebu Pacific Air, operated by Cebu Air, the largest carrier in the Philippines; Tiger Air Australia, owned by Virgin Australia Holdings; ANA Holdings' Vanilla Air; and South Korean independent carrier Jeju Air.

The idea began to crystallize in 2014, when Nok Air and Scoot were working on their joint venture, according to NokScoot CEO Piya Yodmani. They adopted an online system from U.K. software company Air Black Box that enables real-time booking with multiple airlines at a low cost.

"Ultimately, this is to strengthen ourselves against the so-called franchise-model" budget carriers, such as Malaysia's Air Asia and Australia's Qantas-affiliated Jetstar, said Vanilla Air President Katsuya Goto.

Billing the grouping as "the world's first pan-regional" low-cost airline alliance, Wilson said the members own 176 planes, connect to 160 destinations covering a third of the world, and together carried 47 million passengers in 2015.

For now, the scope is limited to sales and distribution, as the airlines look for ways to work together without adding costs. Common mileage programs or interline baggage check-in will not be available, unless airlines make their own arrangements.

Patee Sarasin, Nok Air's CEO, said the alliance is still in its infancy. Regulations and air infrastructure, he said, are the main obstacles to deepening the partnership.

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