SIA, MAS enter into wide-ranging tie-up

The new agreement includes Singapore Airlines subsidiaries SilkAir and Scoot, as well as Malaysia Airlines' sister airline Firefly.
The new agreement includes Singapore Airlines subsidiaries SilkAir and Scoot, as well as Malaysia Airlines' sister airline Firefly.ST PHOTO: LIM YAOHUI

Code-sharing routes to be expanded; revenue sharing proposed for S'pore-Malaysia flights

Air travel between Singapore and Malaysia is expected to grow significantly as part of a wide-ranging tie-up between Singapore Airlines (SIA) and Malaysia Airlines (MAS).

The two carriers yesterday signed a partnership agreement, which heralds a new era of cooperation and allows SIA travellers access to more points in Malaysia.

Malaysian travellers will also have easy access via Changi Airport to SIA's wide network of international flights. This will, in turn, boost Singapore's status as a key air hub in the region, analysts said.

SIA and MAS will expand code-sharing routes under the agreement, and have also proposed to share revenue on flights between Singapore and Malaysia.

Under a code-share agreement, airlines can sell seats on each other's flights to provide passengers with a wider choice of destinations.

Currently, the two airlines code-share on flights between Singapore and Kuala Lumpur, Kota Kinabalu, Kuching and Penang.

The new agreement includes SIA subsidiaries SilkAir and Scoot, as well as MAS' sister airline Firefly.

SIA and SilkAir will code-share on 16 domestic destinations with MAS, including Penang and Langkawi.

In turn, MAS will progressively code-share on flights between Singapore and Malaysia, Europe, South Africa and other destinations after the necessary approvals are granted.

Aviation analyst Shukor Yusof said the move would benefit SIA more than MAS, as it can now code-share on flights to more cities in Malaysia.

He added that the agreement "is definitely positive for MAS at a time when other major airlines have shown little or no interest in it".

 
 
 

Mr Shukor, the founder of Endau Analytics, also noted that the move would benefit consumers by giving them more choices, although this may not translate to lower fares.

The proposal to share revenue - a significant step in the aviation industry - signals cooperation instead of competition between the two airlines in future. SIA and MAS' agreement is also a reflection of the tough operating landscape in South-east Asia, where budget carriers like AirAsia are dominant players.

The Straits Times understands that SIA has revenue-sharing agreements with Air New Zealand, Lufthansa and Scandinavian Airlines.

The partnership agreement follows the signing of a memorandum of understanding in June.

SIA chief executive Goh Choon Phong said the tie-up would be a "win-win" for both airline groups, and provide new benefits for customers. "In particular, the expanded scope of our partnership has the potential to provide a significant boost to the tourism industries in both Malaysia and Singapore, as well as the wider South-east Asia region," he said.

MAS chief executive Izham Ismail said the collaboration with SIA is in line with the Malaysian carrier's long-term business goal of engaging in deep partnerships to extend its reach and global presence.

As part of the agreement, MAS and SIA also plan to offer joint fare products and explore tie-ups between their frequent-flier programmes.

A version of this article appeared in the print edition of The Straits Times on October 31, 2019, with the headline 'SIA, MAS enter into wide-ranging tie-up'. Print Edition | Subscribe