Singapore commission to conduct consultation on proposed commercial cooperation between Malaysia Airlines-SIA

A file photo taken on July 5, 2005 shows a man silhouetted against a Malaysian Airlines plane tail as he looks out through a window at Sydney International Airport. — AFP pic
A file photo taken on July 5, 2005 shows a man silhouetted against a Malaysian Airlines plane tail as he looks out through a window at Sydney International Airport. — AFP pic

SINGAPORE, Nov 27 — The Competition and Consumer Commission of Singapore (CCCS) is conducting a public consultation from today until December 18, 2019 to invite feedback on the Proposed Commercial Cooperation between Singapore Airlines Ltd (SIA) and Malaysia Airlines Bhd (MAB).

In a statement, CCCS said it received a joint application for decision from SIA and MAB on the Proposed Commercial Cooperation and accepted the application as complete on October 30, 2019.

CCCS said it is now assessing whether the Proposed Commercial Cooperation would infringe Section 34 of the Competition Act (Cap. 50B), which prohibits agreements or concerted practices by undertakings which prevent, restrict or distort competition within any market in Singapore.

The Proposed Commercial Cooperation comprises a Commercial Cooperation Framework Agreement that both airlines entered into on October 30, 2019, pursuant to which they agree to cooperate on scheduling, pricing, sales and marketing, and other areas, including special prorate arrangements and expanded code sharing to grow traffic between Malaysia and Singapore and between Malaysia or Singapore and certain agreed markets such as Europe.

They have submitted that while they — including their subsidiaries — provide overlapping direct and indirect routes between Singapore and seven destinations in Malaysia, the relevant market for the purposes of the competitive analysis of the Proposed Commercial Cooperation should be focused on the overlapping direct routes.

The overlapping direct routes comprise Singapore-Kuala Lumpur and Singapore-Kuching, while the overlapping indirect routes comprise Singapore-Kuantan, Singapore-Langkawi, Singapore-Penang, Singapore-Kota Kinabalu, and Singapore-Kota Baru.

Both airlines also submitted that the Proposed Commercial Cooperation is unlikely to result in any adverse effects on competition as, among others, they will continue to face intense competition from low-cost carriers on the overlapping direct routes.

In addition, both parties submitted that the Proposed Commercial Cooperation will also result in significant efficiencies, as well as consumer and economic benefits.

More information on the public consultation can be accessed and downloaded from the CCCS website at www.cccs.gov.sg under the section “Public Register and Consultation”. — Bernama

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