Joint venture between Singapore Airlines and Malaysia Airlines granted regulatory approval
The joint venture (JV) will see the two airlines working together on scheduling, pricing, sales and marketing, including expanded codesharing of flights, among other things, on routes between Singapore and Malaysia.
Chief executive of CCCS Alvin Koh said that while competition in Singapore's aviation industry has intensified with recent entries and exits, the JV can 'lead to airlines coming together to offer better connectivity and options for consumers'. The commitments undertaken by the airlines 'allow for flexibility to react to market developments and ensure that more flights will be added along the Singapore-Kuala Lumpur route as travel demand increases, which would translate to more travel options and better prices for passengers in the long run', added Koh.
A SIA spokesperson said that the company welcomes CCCS' approval, although the cooperation is still subject to regulatory approval from the Malaysian Aviation Commission.
On Mar 24, 2023, the two airlines applied jointly to CCCS on whether their proposed cooperation would be anti-competitive, with a further submission in November 2023 that this cooperation would only include SIA and Malaysia Airlines, and not their affiliated low-cost carriers (LCCs) Scoot and Firefly, respectively.
CCCS found that price and capacity coordination between the two would restrict competition on the air route between Singapore and Kuala Lumpur.
To address the regulator's concerns, the airlines provided various commitments regarding the route, including: preserving the weekly seat capacity levels that existed before the cooperation; before increasing capacity levels on the route, the airlines would need to meet certain performance targets and submit a business plan for approval by CCCS and the Malaysian Aviation Commission; reporting the capacity levels and schedules of both airlines' LCCs on the route; and appointing an independent auditor to ensure compliance with the commitments.
CCCS consulted industry stakeholders from Feb 11 to Mar 4 on the commitments, with no concerns raised.
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