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Competition watchdog seeks public feedback on SIA pact with Malaysia Airlines

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Singapore Airlines and Malaysia Airlines submitted to the CCCS that their tie-up is unlikely to result in any adverse effects on competition.

THE Competition and Consumer Commission of Singapore (CCCS) is inviting feedback on the proposed commercial cooperation between the national flag carriers of Singapore and Malaysia.

The public consultation has started and will end on Dec 18, the competition watchdog announced on Wednesday.

The "wide-ranging" pact between Singapore Airlines (SIA) and Malaysia Airlines Berhad (MAB) will see both parties cooperating on scheduling, pricing, sales and marketing, as well as other areas such as special pro-rate arrangements and expanded code sharing.

CCCS had received a joint application from both airlines on the planned partnership, it said on Wednesday. The commission is assessing whether the tie-up will infringe the Competition Act.

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SIA and MAB currently provide overlapping direct and indirect routes between Singapore and seven destinations in Malaysia.

However, both airlines submitted to CCCS that the relevant market for the competitive analysis of the partnership should be focused on the overlapping direct routes between Singapore and Kuala Lumpur, as well as between Singapore and Kuching.

SIA and MAB also told CCCS that their tie-up is unlikely to result in any adverse effects on competition.

This is because the two airlines will continue to face intense competition from low-cost carriers on overlapping direct routes, and they will still face competition from alternative modes of transportation such as coach services and private car services on the Singapore-Kuala Lumpur route.

Moreover, barriers to entry on their overlapping direct routes are also low, which will allow potential competitors to enter the market, both airlines said.

SIA and MAB also believe the partnership will result in "significant" efficiencies as well as consumer and economic benefits.

These include more competitive fares, more services offered to passengers, benefits to corporate account customers, and improved connectivity for both Singapore and Malaysia, they said.

Proposed in end-October, the commercial cooperation also includes SIA's subsidiaries SilkAir and Scoot, as well as MAB's sister airline, Firefly.

SIA shares were trading 1.2 per cent or 11 Singapore cents lower at S$9.17 as at 2.40pm on Wednesday.

Interested parties can submit their views on the proposed cooperation via email to cccs_feedback@cccs.gov.sg