Summary
- Cebu Pacific expect a significant portion of traffic on the new Manila-Melbourne route to connect to other destinations in Australia using Tigerair Australia;
- Cebu Pacific and Tigerair Australia are founding members of the Value Alliance but the two airlines have generated limited cross-bookings so far;
- The Value Alliance website is about to be relaunched, providing new cross-booking functionality which should also lead to a closer Cebu Pacific-Tigerair Australia relationship;
- Cross-bookings between Tigerair Australia and Scoot will also likely increase as the new Value Alliance website is launched.
Tigerair Australia and Cebu Pacific are both founding members of the Value Alliance, which was launched in May-2016.
Cebu Pacific was already serving Australia when the Value Alliance was established but until now has only served Sydney, where domestic to international connections are inconvenient due to the two terminals being located on opposite sides of the airport. On 14-Aug-2018, Cebu Pacific is launching three weekly flights to Melbourne, where domestic to international connections are more convenient.
Melbourne is also Tigerair Australia's largest base. Cebu Pacific aims to leverage Tigerair Australia's Melbourne network to offer a one-stop product to several cities in Australia including Adelaide, Canberra, Hobart and Perth. Almost all of Cebu Pacific's Sydney traffic will remain point to point, while Melbourne will be used to provide offline access to secondary destinations.
Cebu Pacific serves Sydney with up to seven weekly flights. As Manila-Sydney is a larger local market, feed is more crucial for the long-term viability of the Manila-Melbourne route.
"We expect the partnership with Tigerair Australia will be quite beneficial," Cebu Pacific COO Advisor Rick Howell told CAPA TV in Mar-2018. "With Tigerair being so prevalent in Melbourne we expect to see a real kick in alliance bookings once we launch Melbourne in August this year."
Meanwhile, the late Apr-2018 relaunch of the Value Alliance website comes at an ideal time for the Cebu Pacific-Tigerair Australia relationship as it occurs in the middle of the commercial lead-up to the launch of the Manila-Melbourne route. The website, which had not been updated in nearly two years, will for the first time have booking functionality, enabling consumers to book tickets on flights operated by all eight members.
The new website is part of an initiative to boost cross-bookings. In the first two years of the alliance there have been a very small number of cross-bookings. Value Alliance members are also planning to start jointly marketing their services so their passengers are aware of the potential one-stop combinations.
In addition to Cebu Pacific, Tigerair Australia could see a surge in bookings from Scoot, which serves four destinations in Australia - Gold Coast, Melbourne, Perth and Sydney. Melbourne again represents the best opportunity for feeding Scoot given Melbourne Airport's convenient layout for domestic-international connections and the fact it is Tigerair's largest hub. Scoot is also upgrading Melbourne to daily in May-2018 and introducing a new split schedule, providing more opportunities to connect with Tigerair Australia.
Scoot is another original member of the Value Alliance but has so far has relied on Tigerair Australia parent Virgin Australia for providing offline access to secondary destinations in Australia via an interline arrangement. The new Value Alliance website will create a platform to drive more cross-bookings between Tigerair Australia and Scoot.
The new website can also be used by Tigerair Australia customers to book on other Value Alliance members. However, the biggest synergies are with Cebu Pacific and Scoot as none of the alliance's other members serve Australia.