By Martin Kelly, Editor, Travel Trends

Nothing like a recession to introduce some flex into once-inflexible distribution strategies, as announcements this week by Low Cost Carriers Tiger Airways and Jetstar demonstrate.

After vowing to only sell fares through its own website, Tiger has agreed to distribute through online travel agent Webjet, while Jetstar plans to negotiate interline agreements with 10 international carriers.

In the case of Tiger it’s a small but significant step. Previously the airline has given the impression of being at war with the local industry, wanting to do everything by itself and in its own way.

It had previously rejected approaches from Webjet to distribute product – a move that wouldn’t have cost Tiger anything in commission as Webjet makes its money through transaction fees.

Now commonsense has prevailed – Tiger increases its distribution channels without comprising its cost base, and Webjet is able offer its customers every major Australian domestic carrier.

Meanwhile, the evolution of Jetstar from a pure Low Cost Carrier into a hybrid airline, begun with the introduction of long haul flights and a two-class system, is just about complete with the move to interline ticketing.

Jetstar hopes to have 10 Asian and European carriers on board by the end of this year, and no doubt more will follow.

This entrenches the carrier in the world’s Global Distribution Systems – a fate it once violently eschewed – and paves the way for further evolution up the aviation food chain.

Will this leave space at the bottom for Tiger?

No. There is zero chance the Qantas group, of which Jetstar is now perhaps the key airline, will allow Tiger breathing space.

Travel Trends: February 13, 2009

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