Singapore Airlines, Malaysia Airlines plan tie-up to share revenue, expand routes
They will also hold joint marketing activities to develop tourism
Fiona Lam
Singapore
THE national flag carriers of Singapore and Malaysia have proposed a new wide-ranging partnership, subject to regulatory approvals from the competition authorities.
Singapore Airlines (SIA) and Malaysia Airlines Bhd (MAB) are looking to share revenue on flights between the two countries, expand their codeshare routes, and participate in joint marketing activities to develop tourism, under an agreement inked on Wednesday.
The agreement also includes SIA's subsidiaries SilkAir and Scoot, as well as MAB's sister airline, Firefly.
It comes after the signing of a memorandum of understanding in June this year, which aimed to provide new customer benefits and business opportunities.
As part of the proposed partnership, flights between Singapore and Malaysia will operate under a joint business arrangement. SIA and MAB intend to coordinate their flight schedules to give passengers more flight choices and frequencies.
The two airline groups also plan to offer joint-fare products, align their corporate programmes to "enhance the value proposition" to customers, and explore tie-ups between their frequent-flyer programmes, they said in a joint statement.
Both groups will expand their regional and long-haul codeshare arrangements to include more destinations on each other's networks.
Currently, the airlines codeshare on flights between Singapore and Kuala Lumpur, Kota Kinabalu, Kuching and Penang. With the proposed expansion, SIA and SilkAir will codeshare on MAB's domestic flights and thus serve a total of 16 destinations in Malaysia.
In turn, MAB will codeshare on flights between Singapore and Malaysia, Europe, South Africa and other destinations, once the necessary approvals are granted. This will be implemented in phases.
Subject to regulatory approvals, the codeshare flights will be progressively made available for sale through the airlines' respective booking channels in key markets around the world.
Codeshares are commercial arrangements whereby one airline sells seats on a flight operated by another, with each carrier using their own flight number.
Both flag carriers will also work on joint marketing activities to boost long-haul tourism to Malaysia and Singapore.
In addition, they will explore the potential development of airpasses, which allow multi-stop itineraries. The possible airpasses will give customers who travel to Malaysia through Kuala Lumpur and Singapore more choices to visit other parts of the country such as Kuantan, Kuching and Kota Kinabalu on a single ticket.
The proposed partnership was announced a week after Malaysia's government said that sovereign fund Khazanah Nasional Bhd, which owns MAB, had shortlisted four potential investors to buy a strategic stake in the ailing carrier. Of the four, three are airlines: Qatar Airways, Japan Airlines and China Southern Airlines, according to The Edge Malaysia. Khazanah is expected to decide on its preferred candidate soon, as MAB has enough cash to sustain its operations only until April 2020, the report said.
SIA shares closed up four cents, or 0.44 per cent, at S$9.24 on Wednesday, following the announcement.
