Watchdog seeks views on SIA's deal with Malaysia Airlines

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

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

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 that 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 such as cars and coaches. They 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 the pluses of the deal, such as more competitive fares, improved connectivity between Singapore and Malaysia, and benefits to both business and frequent flier customers.

If the deal gets the green light, SIA and SilkAir plan to code-share on Malaysia Airlines' domestic flights and serve 16 destinations in Malaysia. In turn, Malaysia Airlines will progressively code-share on flights between Singapore and Malaysia, Europe, South Africa and other destinations.

SIA and Malaysia Airlines will also look into developing air passes, which will give customers travelling to Malaysia through KL and Singapore more choices to visit other parts of Malaysia on a single ticket.

For more information, visit the CCCS website at www.cccs.gov.sg