SINGAPORE’S competition watchdog is seeking public feedback on the proposed collaboration between Singapore Airlines (SIA) and Garuda Indonesia.
The airlines jointly submitted an application on their proposed cooperation to the regulator in February, the Competition and Consumer Commission of Singapore said on Wednesday (Mar 13).
The companies intend to work together on scheduling, pricing, sales, marketing and other commercial areas, including expanded code-sharing of flights and special prorated arrangements.
Under the proposed alliance, they will jointly plan and manage capacity, pricing and inter-airline financial settlements. Profits from their services between Singapore and Indonesia will be shared equally.
Garuda and SIA have 10 overlapping origin-destination routes among their air passenger transport services between Singapore and Indonesia, on both direct and non-direct bases. The direct overlapping routes form the relevant markets for the purpose of competitive analysis in their proposal, the companies said.
The tie-up is unlikely to reduce competition, they added, as they will continue to face “intense” rivalry from low-cost carriers on the direct overlapping routes. These routes also have low barriers to entry, making it easier for potential competitors to join in as well.
Conversely, a Garuda-SIA alliance would benefit consumers and the two countries, they added.
The public consultation, which takes place from Mar 14 to Mar 27, will help the Competition and Consumer Commission of Singapore assess whether the collaboration would prevent, restrict or distort competition in the Republic’s aviation market. It is also taking into account Scoot and Citilink Indonesia, the budget carriers of SIA and Garuda, respectively.
SIA closed 0.5 per cent or S$0.03 up at S$6.39 on Wednesday, before the watchdog announced that it was seeking feedback.
