Singapore's competition regulator has given conditional approval for the Proposed Commercial Cooperation (Proposed Cooperation/Joint Venture) between Singapore Airlines and All Nippon Airways (ANA).
Singapore's competition regulator has given conditional approval for the Proposed Commercial Cooperation (Proposed Cooperation/Joint Venture) between Singapore Airlines and All Nippon Airways (ANA).
In a release posted on March 21, the Competition and Consumer Commission of Singapore (CCCS) granted conditional approval for the Proposed Cooperation between the Singaporean and Japanese carriers covering air passenger transport services between Singapore and Japan.
The decision comes after the CCCS received an application from the two carriers in July 2023 to clarify if the Proposed Cooperation would infringe section 34 of Singapore's Competition Act 2004. Both carriers previously submitted another - their first joint application - in June 2021. The application submitted in 2023 was an updated application after market data signaled a “a degree of market recovery from the COVID-19 pandemic.”
Both Singapore Airlines and ANA highlighted the benefits of their Proposed Cooperation including improved connectivity between Singapore and Japan, more competitive fares arising from the elimination of double marginalization and better fare combinability, enhanced air travel product services between the two countries, expanded virtual network of the airlines, and significant benefits to corporate account customers and greater reciprocal frequent flyer benefits for members of both airlines.
According to the CCCS, it reviewed information provided by the two airlines and third party feedback and found competition concerns including on air services between Singapore and Tokyo. The CCCS noted Singapore Airlines and ANA possess “substantial market shares” offering direct flights between Singapore and Tokyo, and have sustained a high combined market share in recent years.
While the CCCS recognized the market share of both airlines on flights between Japan and Singapore, it found the impact on competition arising from the expansion is not conclusive.
“While there is evidence of expansion by an existing competitor in recent years, CCCS assessed that the impact on competition arising from the expansion is not conclusive. Additionally, significant barriers to entry and expansion continue to exist, making it difficult for both new and existing competitors to compete effectively with the Applicants (ANA/Singapore Airlines),” the CCCS said.
As it granted the conditional approval, the CCCS listed proposed commitments which includes maintaining seat capacity on an “aggregated basis” between the two airlines on the Singapore-Tokyo route at “stipulated levels,” a business plan detailing growth figures both airlines can feasibily achieve when “certain trigger factors are conjuctively met.”
The CCCS also addressed both Singapore Airlines' and ANA's budget airlines, as it also proposed a commitment for a report on flight schedules and individual capacity levels operated by Singapore Airlines' and ANA's budget airlines (LCCs) on the Singapore-Tokyo route for the regulator to monitor whether the capacity on the route “have been shifted from the respective LCCs to the full service carriers.
ANA's budget subsidiaries include Peach Aviation and Air Japan, and Scoot under Singapore Airlines.
The last proposed commitment from the CCCS is for the appointment of an independent auditor to monitor compliance with the regulator's proposed commitments it is asking from the two airlines.
“After evaluating the feedback provided, CCCS considered the Proposed Commitments to be sufficient to mitigate the competition concerns arising from the Proposed Cooperation,” the CCCS concluded.
First announced in 2020, Singapore Airlines and ANA – both Star Alliance member airlines - announced their plans for form a joint venture. Under the proposed joint venture, both airlines would cooperate on air services between Singapore and Japan, as well as in key markets including Australia, India, Indonesia, and Malaysia.
Last April 2024, Japan's Ministry of Land, Infrastructure, Transport, and Tourism (MOLITT) approved the two airlines' application for the joint venture.
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