SINGAPORE - Singapore Airlines (SIA) and Lufthansa have received the all-clear from the competition watchdog to jointly plan routes, schedules and fares.
The approval from the Competition Commission of Singapore (CCS), which came on Monday (Dec 12), also includes revenue-sharing on routes from Singapore to the European cities of Frankfurt, Munich, Dusseldorf and Zurich.
In February, SIA and Lufthansa had requested for permission to cooperate extensively on international passenger services between selected Asian and European points.
These include flights from Singapore, Indonesia, Malaysia and Australia, to points in Germany, Austria, Switzerland and Belgium.
Under the partnership, the parties will cooperate on pricing, inventory management, sales and marketing.
In assessing the application, the competition commission reviewed information provided by the airlines as well as feedback from third-parties in a public consultation.
Concerns were raised for two specific routes, Singapore-Frankfurt and Singapore-Zurich that only SIA and Lufthansa operate with direct flights.
With a combined market share of more than 80 per cent on the routes, the feedback from the public consultation was that the price and capacity coordination could lead to a cut in capacity and higher fares.
To address the concerns, SIA and Lufthansa have promised there will be no cuts in the number of seats available on the Singapore-Frankfurt and Singapore-Zurich sectors.
In fact, there are plans to add seats.
The commission is satisfied the commitments are sufficient to mitigate the concerns.
"In particular, the commitments would ensure an increase in capacity and frequency on flights between the Singapore-Frankfurt and Singapore-Zurich routes, and would lead to increased passenger numbers and tourists to Singapore, and accordingly benefit Singapore's economy," it said.