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New SIA pact with Malaysia Airlines may get off the ground within a year

THE “wide-ranging” commercial pact between the national carriers of Singapore and Malaysia to share revenue on flights between the two countries and expand codeshare routes could take off the ground within a year, said Singapore Airlines (SIA) chief executive Goh Choon Phong on Wednesday.

“It depends on all the necessary regulatory approvals. I would say, typically in such arrangements, it would take anything from nine months to a year,” said Mr Goh in response to queries on when the joint business arrangement between SIA and Malaysia Airlines Berhad would likely get off the ground.

On how the fierce rivals managed to pull off a deal once deemed “wishful thinking” and would eventually make them tight partners, Mr Goh said: “It’s a win-win. It’s very clear in our discussions that we are very comfortable with the arrangement. What happens between the two countries is beyond me but we are talking about commercial organisations and how we can have an arrangement whereby both parties can walk away as a winner.”

Last week, SIA and Malaysia Airlines disclosed that they have agreeed to coordinate flight schedules between both countries and also plan to offer joint fare products plus explore tie-ups between their frequent-flyer programmes.

The new agreement also includes SIA’s subsidiaries SilkAir and Scoot, as well as Malaysia Airlines' sister carrier Firefly. It will see both flag carriers joining hands further to market tourism in an extensive follow up from a memorandum of understanding that was inked in June this year.

“Of course, actual execution is subject to regulatory approval,” Mr Goh stressed at a briefing on the airline’s recently-released second-quarter results.

He said such collaboration among airlines were also “good, interim solutions” until the regulatory environment in Asia Pacific becomes more conducive or “more liberal” for consolidation among players, such as what has unfolded in Europe as well as the United States.

“I believe we can look at other ways to co-operate...for SIA to expand its network and reach into the interior points within the country of our partners which we otherwise wouldn’t have available to us,” he said, in response to a query on whether SIA was open to mergers with another airline in the region.

On whether the airline has held talks to invest in Malaysia Airlines, he replied :”There has not been any conversation on that”.

As for SIA’s fleet expansion, Mr Goh said the airline will continue with its “very aggressive aircraft acquisition”, much of which involves renewals as it is a deliberate strategy to allow it to operate in markets previously not possible or commercially feasible. He cited the Airbus A350-900 which has enabled SIA to launch flights to Dusseldorf, Germany.

The airline group will have a fleet of 208 aircraft as at second half of fiscal year 2020 from 207 as at first half ended September 2019.

 

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