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Competition watchdog seeks public feedback on SIA and ANA's proposed commercial cooperation

Atiqah Mokhtar
Atiqah Mokhtar • 2 min read
Competition watchdog seeks public feedback on SIA and ANA's proposed commercial cooperation
The public can provide feedback on the matter between June 21 to July 12.
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The Competition and Consumer Commission of Singapore (CCCS) is inviting the public to give feedback on the proposed commercial cooperation between Singapore Airlines (SIA) and All Nippon Airways Co (ANA).

The public can provide feedback on the matter between June 21 to July 12.

SIA and ANA had signed a joint venture framework agreement in relation to the proposed commercial cooperation in January 2020.

On June 2, CCCS received a complete joint application for decision from SIA and ANA on whether the proposed commercial cooperation would infringe the Competition Act.

Under the proposed commercial cooperation, SIA and ANA agree to cooperate on scheduling, pricing, sales and marketing, and other commercial areas (including expanded code-sharing and special prorate arrangements) to bring about a metal-neutral alliance (whereby both airlines share equally in the profits, effectively indifferent to which plane or ‘metal’ carries a passenger) in respect of their services between Japan and Singapore.

It will include both airlines’ subsidiaries, namely SilkAir (Singapore) which is in the process of being integrated into SIA, Air Japan Co and ANA Wings Co.

According to CCCS, SIA and ANA have overlapping services on eight routes, which the airlines state are “unlikely to result in any adverse effects on competition” given that the increment in the combined passenger shares on five of the overlapping routes is minimal; intense competition on the direct overlapping routes from other airlines; and low barriers to entry to the overlapping routes.

SIA and ANA also submitted to CCCS that the proposed commercial cooperation is expected to result in “significant consumer and economic benefits and efficiencies” which may include increased frequencies or capacities on routes, introduction of new services between Japan and Singapore, and more competitive fares.

Shares in SIA closed 7 cents or 1.39% lower at $4.98 on June 21.

Photo: Bloomberg

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