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May 11, 2022

SIA and MAB get conditional nod from CCCS for commercial cooperation

A commercial cooperation framework agreement will facilitate the cooperation.

Singapore Airlines Limited (SIA) and Malaysia Airlines Berhad (MAB) have secured conditional clearance from the Competition and Consumer Commission of Singapore (CCCS) for the proposed commercial cooperation between them.

The commercial cooperation framework agreement, which was signed by the parties in October 2019, will facilitate the cooperation.

As to whether the alliance would breach section 34 of the Competition Act, the Singaporean competition watchdog accepted a joint application for a decision from the parties.

CCCS carried out a public consultation during its evaluation. It noted that the relevant markets for this evaluation should include air passenger services between Singapore and Malaysia based on third-party feedback and the approach taken by CCCS in past airline cases.

The routes covered under the services are Singapore to Kuching and vice versa, as well as Singapore to Kuala Lumpur, including Seletar Airport to Sultan Abdul Aziz Shah Airport, and vice versa.

The Covid-19 pandemic, along with border curbs, rattled the aviation sector, which mainly affected competition on overlapping direct routes.

CCCS stated: “this limited CCCS’s assessment, based on available information, as to the competition impact of the Cooperation post-Covid-19, and the parties’ ability to substantiate its claims of net economic benefits from the same.”

Based on this background, the parties submitted a set of proposed commitments, which will enable the implementation of a joint business arrangement (JBA) during the recovery phase.

CCCS said that the commitments can offer adequate safeguards for JBA implementation during the recovery phase of the pandemic.

This February, Collins Aerospace agreed to provide maintenance repair overhaul services to a fleet of 55 Boeing 787 aircraft belonging to Singapore Airlines.

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