SINGAPORE - Singapore Airlines (SIA) and Malaysia Airlines have been granted conditional approval for a partnership that aims to grow traffic between Singapore, Malaysia, and other markets, said the Competition and Consumer Commission of Singapore (CCCS) on Tuesday (May 10).
The agreement, which the two airlines signed in October 2019, involves both parties working together in areas such as joint sales and marketing, as well as revenue sharing.
It also includes expanded code sharing to grow traffic between the two countries, as well as between Singapore or Malaysia and markets such as Europe.
Under a code-share agreement, airlines can sell seats on each other's flights to provide passengers with a wider choice of destinations.
CCCS added that it has granted conditional approval of the partnership after accepting a set of proposed commitments from both carriers. It had also conducted public consultation during its assessment.
Under the commitments, both airlines will have to subject the arrangement to CCCS for further review when a series of indicators signal sustained recovery and normality of aviation activity on overlapping direct routes between Singapore and Malaysia, such as between Singapore, Kuala Lumpur and Kuching.
CCCS said these proposed commitments would provide sufficient safeguard to ensure that the business arrangement between both airlines is implemented only during recovery from the Covid-19 pandemic.
Due to the pandemic, competition on these overlapping direct routes is limited even without the arrangement between both airlines. Any impact on competition which may happen is also mitigated, CCCS said.
It noted concerns raised by third parties about the agreement between the two airlines. But it added that the commitments by the airlines will allow better assessment of these concerns, as well as the competition impact and benefits of the arrangement, when there is sustained recovery in the aviation sector.
It was previously reported that the tie-up between the two airlines will allow SIA travellers access to more places in Malaysia.
Malaysian travellers will also have easy access via Changi Airport to SIA's wide network of international flights, which will help to boost Singapore's status as a key air hub in the region.
The new agreement includes SIA subsidiary Scoot, as well as Malaysia Airlines' sister airline Firefly.