AirAsia chief shrugs off budget airline tie-up

KUALA LUMPUR • The chief executive of budget carrier AirAsia has dismissed the threat posed by the newly launched Value Alliance, the world's biggest grouping of budget airlines. Tan Sri Tony Fernandes said the alliance posed no competition because it lacked common ownership.

Commenting on the tie-up among eight Asian budget carriers announced last month aimed at growing the member airlines' distribution channels and networks, Mr Fernandes said he doubted the new grouping would threaten AirAsia's position in the market. AirAsia is the region's biggest discount carrier.

"Value Alliance isn't going to compete with us. Let's be real," Mr Fernandes told reporters at a press conference on the sidelines of the World Economic Forum on Asean meeting in Kuala Lumpur yesterday.

The alliance joins Singapore Airlines subsidiaries Scoot and Tigerair with Tigerair Australia, Cebu Pacific in the Philippines, South Korea's Jeju Air, Japan's Vanilla Air, as well as Thailand's Nok Air and NokScoot.

As part of the cooperation, travellers will be able to view and book seats on flights from any of the eight member carriers in a single transaction, from each partner's website.

Value Alliance operates more than 176 aircraft that serve more than 160 destinations across the region.

Though Mr Fernandes downplayed the potential challenge posed by the grouping, he said Air- Asia would adapt to the changes. "People will find different ways of competing with us and we will adapt. We'll get better," he said.

Trinna Leong

A version of this article appeared in the print edition of The Straits Times on June 02, 2016, with the headline 'AirAsia chief shrugs off budget airline tie-up'. Print Edition | Subscribe