Competition watchdog gives SIA, Malaysia Airlines conditional approval to continue cooperation
Sign up now: Get ST's newsletters delivered to your inbox
The joint venture is an update to an agreement the airlines first inked in October 2019.
PHOTO: REUTERS
Savanna Tai
Follow topic:
SINGAPORE – Singapore Airlines (SIA) and Malaysia Airlines have been granted conditional approval for their proposed cooperation by the Competition and Consumer Commission of Singapore (CCCS) on July 7, after both airlines addressed competition concerns.
This joint venture is an update to an agreement the airlines first inked in October 2019 to work together in areas such as scheduling, pricing, sales and marketing, as well as expanded codesharing – or selling seats on each other’s flights – to grow traffic between the two countries and markets such as Europe.
CCCS gave the original cooperation proposal conditional approval in May 2022
One key condition required the airlines to resubmit the proposal for review once air travel recovered.
The airlines submitted their updated application in March 2023, followed by a revision in November 2023 to exclude SIA’s Scoot and Malaysia Airlines’ Firefly from the arrangement. The low-cost carriers were included under the terms of the 2019 agreement.
In its assessment, CCCS found that the airlines’ coordination on their flight prices and capacities would restrict competition on the airlines’ overlapping route between Singapore and Kuala Lumpur.
To address the watchdog’s concerns, the airlines committed to maintaining weekly seat capacity before their proposed cooperation; proposing a capacity increase after meeting certain performance targets; and reporting operation data of its low-cost carriers on the Singapore-Kuala Lumpur route.
Both parties also proposed to appoint an independent auditor to monitor compliance with their proposed commitments.
CCCS consulted industry stakeholders from Feb 11 to March 4 in 2025, and no concerns were raised.
In granting conditional approval of the revised cooperation on July 7, it said it took into account market developments, such as the impending closure of Jetstar Asia, in accepting the airlines’ commitments as sufficient in addressing the competition concerns.
Jetstar Asia had announced that it will cease operations on July 31
The competition watchdog noted that the airlines said their proposed cooperation is expected to have consumer and economic benefits, including an enhanced air travel product for Singapore-to-Malaysia services, an increased number of service offerings for passengers, and more competitive fares.
CCCS chief executive Alvin Koh said the proposed commitments offered by SIA and Malaysia Airlines allow flexibility to react to market developments and ensure more flights will be added on the Singapore-Kuala Lumpur route as travel demand increases.
“As Singapore becomes increasingly integrated with the global economy in a post-Covid-19 world, competition in Singapore’s aviation industry has intensified, with recent entries and exits in the market,” he said.
“Nevertheless, the joint venture can lead to airlines coming together to offer better connectivity and options for consumers.”
Mr Koh said that the CCCS will continue to monitor developments in this sector to ensure that competition can yield good outcomes for consumers.
Welcoming CCCS’ approval, an SIA spokesperson said: “The enhanced win-win partnership aims to provide customers with better value, additional options and seamless flight connectivity, while boosting tourism in both Malaysia and Singapore.”
Malaysia Airlines told ST on July 8 that it is in active talks with SIA on a potential joint business arrangement to improve connectivity and offer greater value to customers travelling between Malaysia and Singapore.
It also noted that the proposed tie-up remains subject to clearance from Malaysian regulators.
“Malaysia Airlines continues to ensure full compliance with all regulatory requirements as the process progresses,” it added.
