SIA proposes joint venture with Japan's ANA

Singapore

SINGAPORE Airlines (SIA) and Japan's All Nippon Airways (ANA) on Friday signed a joint venture (JV) framework agreement, with a view to boosting the Singapore and Japan air hubs and improving flight connectivity for passengers.

If given the green light by authorities, the proposed JV is expected to drive passenger traffic and offer more flight options for customers.

"We expect this JV to further promote Japan as a tourist destination and bring about more traffic - that itself should benefit both carriers in terms of revenue," Goh Choon Phong, chief executive officer (CEO) of SIA, told the media at ANA Intercontinental Tokyo in Japan where the signing took place.

This would also open up other areas of collaboration such as digitalisation or sustainability efforts to improve cost savings.

The JV comes as Japan sees an increasing number of visitors from Singapore year on year, according to Yuji Hirako, president and CEO of ANA, in his welcome remarks at the signing.

There were some 490,000 passengers flying from Singapore to Japan in 2019, a 13 per cent increase from a year ago period, according to official data.

The tie-up will allow the carriers to coordinate networks and flight schedules to give passengers greater connectivity on services between Singapore and Japan, as well as in key markets including Australia, India, Indonesia and Malaysia.

SIA and ANA will also be able to offer customers more flight options, a wider range of products across both carriers, as well as tie-ups between frequent flyer programmes.

Mr Goh said the partnership will give customers increased flight frequencies and travel convenience. In addition, the two airline groups will align their programmes for corporate clients.

The proposed JV goes beyond SIA and ANA's existing partnership, which focuses on codeshare flights, mileage programmes, lounge access and coordination on check-in baggage and connecting flights. The airlines are also Star Alliance members.

Mr Hirako said the latest tie-up will help the two carriers further differentiate themselves from competitors.

DBS Bank aviation and transport analyst Paul Yong sees the enhanced partnership as one that is beneficial for both airlines. "The JV will mainly have a positive impact on revenues for both ANA and SIA, as the increased flight connectivity and more destination offerings should help attract more of the joint venture partner's customers to fly on each other's flights," said Mr Yong.

"The tie-ups between their frequent flyer programmes and aligned corporate programmes should also help to improve customer 'stickiness' for both of the carriers," he added.

SIA will continue to look into more JV partnerships with suitable airlines as part of the airline's growth strategy, according to Mr Goh. "By working with like-minded partners, we can enhance our propositions for the customers, both corporate and individuals, and thereby benefit through increased revenue to the company," he said.

SIA will become the third airline JV partner for ANA, if the deal is authorised. ANA's other JV partners are US-based United Airlines and Germany's flag carrier Lufthansa Group.

SIA already has JVs with Air New Zealand, Lufthansa and Denmark's flag carrier SAS.

SIA has also applied to partner Malaysia Airlines to share revenue on flights, expand their codeshare routes, and participate in joint marketing activities. Singapore's competition watchdog on Dec 18 ended its public consultation on the proposed cooperation.