The agreement includes expanding code-sharing routes and revenue sharing on certain flights to increase collective revenue for both carriers.
Singapore Airlines Ltd (SIA) and Malaysia Airlines Bhd (MH) have received conditional approval from Singapore’s competition regulator to go ahead with a mutually beneficial agreement between both national carriers. The agreement includes expanding code-sharing routes and revenue sharing on certain flights.
Both airlines tended in their official assessments on the agreement in October 2019, and was approved after public consultation in November and December of the same year according to a statement by the Competition and Consumer Commission of Singapore (CCCS).
The combined efforts of both major commercial carriers anticipates a so-called “metal-neutral alliance,” or agreement, whereby collective revenue can be shared regardless of whose aircraft is deployed.
CCCS said for the purposes of this assessment, the agreement “should comprise direct air passenger services between Singapore and Malaysia,” in particular Singapore to Kuala Lumpur and Singapore to Kuching, in the state of Sarawak.
POST-PANDEMIC TRAVEL PUSHING AIRLINES TO COOPERATE
In order to increase profits as the aviation industry recovers from a two-year travel international ban, airlines globally have been cooperating more closely through such tie-ups as code sharing, joint marketing activities, and revenue sharing in order to expand their networks at a minimal cost.
These partnerships have worked to help commercial carriers offer travellers better public connectivity to more destinations.
Seeing as the partnership agreement between SIA and MH was made before the pandemic took over, both carriers had to come up with a contingency plan and new proposed commitments to be implemented during the recovery phase. This will eventually be reviewed as the industry recovers completely.
As per both carriers’ original announcement in 2019, the agreement was proposed as a “wide-ranging commercial agreement” to “significantly strengthen the long-standing partnership between the two airline groups”.
“Subject to regulatory approvals from the relevant competition authorities, the national carriers propose to share revenue on flights between Singapore and Malaysia, expand codeshare routes, and participate in joint marketing activities to develop tourism,” both carriers said at the time.
In November 2021, the pair said they would reactivate their codeshare arrangement between Singapore and Kuala Lumpur, and expand it to include 15 domestic points in Malaysia, seven destinations in Europe, and two cities in South Africa.
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