Competition watchdog seeks public feedback on SIA-Malaysia Airlines deal

SIA announced an agreement with Malaysia Airlines on Oct 30, 2019, that would "significantly strengthen" the partnership between the two groups.
SIA announced an agreement with Malaysia Airlines on Oct 30, 2019, that would "significantly strengthen" the partnership between the two groups.PHOTO: ST FILE

SINGAPORE - The competition watchdog is seeking public feedback regarding the recently announced tie-up between Singapore Airlines (SIA) and Malaysia Airlines.

The public can send their views on the deal to the Competition and Consumer Commission of Singapore (CCCS) until Dec 18.

SIA announced an agreement with Malaysia Airlines on Oct 30 that would "significantly strengthen" the partnership between the two groups.

It involves sharing revenue on flights between Singapore and Malaysia, expanding codeshare routes and participating in joint marketing activities to develop tourism.

The CCCS will assess if the deal infringes section 34 of the Competition Act, which prohibits tie-ups that prevent, restrict or distort competition within any market in Singapore.

SIA and Malaysia Airlines said that while they do provide overlapping routes between Singapore and seven Malaysian destinations, the scope of the CCCS analysis should focus on the overlapping direct routes between Singapore (Changi and Seletar Airports) and Kuala Lumpur (KL International and Sultan Abdul Aziz Shah Airports) and between Singapore (Changi) and Kuching (Kuching International Airport).

They stated their deal is "unlikely" to be anti-competitive as the overlapping direct routes will "continue to face intense competition" from low-cost carriers and alternative modes of transport like cars and coaches.

The airlines added that the "low barriers to entry" on the overlapping direct routes also make it easier for potential competitors to enter the market.

They also highlighted pluses of the deal, such as more competitive fares, improved connectivity between Singapore and Malaysia and benefits to both business and frequent flyer customers.

If the deal gets the green light, SIA and SilkAir plan to codeshare on Malaysia Airlines' domestic flights and serve 16 destinations in Malaysia.

 
 

In turn, Malaysia Airlines will progressively codeshare on flights between Singapore and Malaysia, Europe, South Africa and other destinations once approvals are granted.

SIA and Malaysia Airlines have agreed to work on joint marketing activities to boost long-haul tourism to Malaysia and Singapore.

They will also look into developing airpasses, which will let customers travelling to Malaysia through KL and Singapore more choices to visit other parts Malaysia like Kuantan, Kuching and Kota Kinabalu on a single ticket.

More information is available from the CCCS website at www.cccs.gov.sg. Submissions close on Dec 18.