, Singapore

CCCS launches public consultation on SIA-ANA joint venture

The government agency is assessing whether the joint venture infringes on competition laws.

The Competition and Consumer Commission of Singapore (CCCS) is seeking public feedback on the proposed joint venture framework agreement on cooperation between Singapore Airlines Limited (SIA) and Japan’s All Nippon Airways Co., Ltd. (ANA).

Under the joint venture,  the parties 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 in respect of their services between Japan and Singapore.

The JV will also extend to the two airlines respective subsidiaries like SilkAir (Singapore) Private Limited (which is in the process of being integrated into SIA), Air Japan Co., Ltd. and ANA Wings Co., Ltd.

The CCCS has accepted SIA and ANA’s application last 2 June and is now assessing whether the joint venture would infringe section 34 of the Competition Act (Cap. 50B), which prohibits agreements or concerted practices by undertakings which prevent, restrict or distort competition within any market in Singapore

However, the two airlines pointed out that the joint venture  is unlikely to result in any adverse effects on competition as the combined passenger share of the parties on five out of eight of the overlapping routes is minimal.

Additionally, the two airlines will continue to face intense competition from competitors on the overlapping routes that are direct routes whilst the existing low barriers to entry on the overlapping routes would facilitate entry by potential competitors.

SIA and ANA currently overlap on eight routes.

The closing date for public feedback is on 12 July.
 

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