Competition commission seeks feedback on SIA, Lufthansa venture
SINGAPORE — The Competition Commission of Singapore (CCS) is seeking public feedback on a proposed joint venture between Singapore Airlines (SIA) and Germany’s Lufthansa that includes expanding codeshare ties, providing customers of the two carriers access to dozens of new routes.
SINGAPORE — The Competition Commission of Singapore (CCS) is seeking public feedback on a proposed joint venture between Singapore Airlines (SIA) and Germany’s Lufthansa that includes expanding codeshare ties, providing customers of the two carriers access to dozens of new routes.
Both airlines had said the proposed venture would mean cooperation on pricing and inventory management, as well as sales and marketing. For non-stop or direct services, it would involve schedule and capacity coordination and revenue sharing. The agreement was signed last November.
Analysts said CCS’ call is standard procedure in line with what competition authorities in other countries do in such cases.
“In this case, Lufthansa and SIA are the only two carriers flying directly between Germany and Singapore, and so they (the CCS) are likely to have concerns about how the proposed joint venture would affect competition. Ultimately, the two airlines will be able to show that it is a very competitive market, and that this agreement will help them compete against the Middle East carriers, in particular,” said Mr Ellis Taylor, Asia finance editor at Flightglobal.
CCS said it received notification on Feb 5 of the proposed venture that involves cooperation between SIA and Lufthansa on scheduled air passenger services between certain European countries — specifically Germany, Austria, Switzerland and Belgium — and certain Asia/Asia-Pacific countries — specifically Singapore, Indonesia, Malaysia and Australia.
Citing the airlines’ submission, the CCS noted that the proposed venture is expected to channel more passenger traffic through Singapore, which will give rise to significant benefits to the travelling public in terms of the expansion of travel options, increased network connectivity, better scheduling of services and harmonised service offerings.
“The parties envisage that the proposed joint venture is also expected to generate significant economic benefits to Singapore,” said CCS
The closing date for feedback submission is April 19.
Rumi Hardasmalani
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