SINGAPORE – The Competition and Consumer Commission of Singapore (CCCS) is seeking public feedback on a proposed business tie-up between Singapore Airlines (SIA) and Japan-based airline All Nippon Airways (ANA).
The airlines entered into a proposed commercial cooperation on Jan 31 this year, in which they agreed to cooperate on scheduling, pricing, sales and marketing, and other commercial areas.
The proposed cooperation will extend to the parties’ subsidiaries, SilkAir (Singapore), which is in the process of being integrated into SIA, as well as Air Japan and ANA Wings.
The competition watchdog said it received and accepted a joint application as of June 2, and is now assessing whether it would infringe section 34 of the Competition Act, which prohibits agreements or concerted practices by undertakings which prevent, restrict or distort competition within any market in Singapore.
SIA and ANA submitted that they overlap on eight air passenger transport routes between Japan and Singapore on a direct or one-stop basis, said CCCS.
Both parties said the proposed cooperation is “unlikely to result in any adverse effects on competition”, according to the media release.
The increment in the combined passenger share of the airlines on five out of eight of the overlapping routes is minimal, both parties said.
They added that there is still “intense competition from competitors on the overlapping routes that are direct routes”, and noted that the existing low barriers to entry on the overlapping routes would facilitate entry by potential competitors.
According to SIA and ANA, the proposed cooperation “is expected to result in significant consumer and economic benefits and efficiencies”.
These include an increased number of itinerary options for travellers, potentially increased route frequencies or capacity, or the introduction of new services between Japan and Singapore.
There could also be more competitive fares, through the reduction of double marginalisation, which refers to price mark-ups by two firms.
It could also lead to improved connectivity for both Japan and Singapore, better utilisation of both parties’ assets and combined efforts to recover from the effects of Covid-19. This could have “consequential benefits to the aviation and tourism industries of both Japan and Singapore”, they said.
Members of the public who wish to provide feedback can do so till July 12.
More information on the public consultation can be found on the CCCS website under the section Public Consultation.
Join ST’s Telegram channel here and get the latest breaking news delivered to you.
Source: Read Full Article