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Vanilla Air exits Value Alliance
March 22nd 2019
Parent alliance technology company sold to investment firm. Read More »
Vanilla Air will exit the Value Alliance on 30 March ahead of its integration with Peach Aviation. Both Vanilla and Peach are owned by ANA HD. Peach, which is not a member of any alliance, is largely taking over Vanilla and will be the surviving brand.
Peach has not made any comments about partnerships, but parent ANA HD remains an investor in the technology platform that enabled the alliance to exist by cross-selling tickets and ancillaries with minimal change and cost. The technology platform is Air Black Box Asia-Pacific, which is a Singapore-based unit partially-owned by Air Black Box. The solution providing the cross-selling was originally called Panther but is now the Travel Connection Platform.
At last public disclosure in 2016, ANA HD and Cebu Pacific each acquired a 15% stake in Air Black Box Asia-Pacific for an undisclosed sum. Nok and Scoot reduced their holdings from 25% to 15% each while VaultPAD Ventures cut its stake from 50% to 40%.
Parent Air Black Box was sold to US investment firm 777 Partners last September, but the transaction was not announced until this month. 777 Partners bought VaultPAD's stake, Air Black Box CEO Ian Reyner said. 777 Partners has invested in Canadian ULCC Flair, and intends to re-launch US airline World Airways as a long-haul LCC. Both airlines appear to be candidates for the Air Black Box platform. 777 Partners briefly says on its website: “World Airways will be the first airline market entrant to align with both US and foreign ultra-low cost carriers for interline feed traffic.”
Value Alliance and the U-FLY Alliance both launched in 2016 anticipating Air Black Box’s platform. Value Alliance in 2018 re-launched its website to cross-sell, but U-FLY did not implement the technology.
U-FLY’s development has largely ceased since a 2017 management change. Value Alliance has lost some momentum as key member airlines have also had management changes. Since their start, Value was a pan-Asian platform while U-FLY was focused on the various smaller airlines in HNA’s Greater China portfolio. U-FLY later had a non-HNA airline join: Korea’s Eastar Jet. U-FLY's website no longer works, and a spokesperson did not return a request for comment.
Although Value and U-Fly are called alliances, they are less like the branded global alliances (oneworld, SkyTeam and Star) and more like distribution platforms. At the onset, Air Black Box cautioned it did not want to encroach on the GDS space. Although some member airlines say cross-airline booking volume is low, others say this is incremental revenue with little associated cost.
Value’s members have declined with the integration of Tigerair into Scoot. Value’s website no longer lists Tigerair Australia as a member.
Under new ownership, ABB plans to expand its portfolio, Reyner says. ABB sees airlines using its solution for their own sales rather than go through a grouping or alliance of airlines. Airprots could also use the technology.
