[SINGAPORE] Singapore’s competition watchdog on Friday (Mar 21) said it has conditionally approved a proposed commercial cooperation between Singapore Airlines (SIA) and All Nippon Airways (ANA) after accepting their commitments to not infringe competition laws.
The decision comes 20 months after the Competition and Consumer Commission of Singapore (CCCS) received an updated joint application from the two airlines on providing flight services between the Republic and Japan.
In assessing the proposal, CCCS noted in a statement that SIA and ANA have “substantial market shares” offering direct flights between Singapore and Tokyo, and have “sustained a high combined market share in recent years”.
This is even as SIA and ANA are the main competitors on the Singapore-Tokyo and Tokyo-Singapore routes, CCCS noted, citing third-party feedback.
“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,” the watchdog said.
Significant barriers to entry and expansion also continue to exist, it added, making it difficult for both new and existing players to compete effectively with the two airlines.
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The carriers said their proposed cooperation would lead to several benefits.
Among them is improved connectivity for both Singapore and Japan, with “consequential benefits” to the South-east Asian country’s aviation industry and tourism.
The collaboration would also increase offerings for travellers while bringing “more competitive fares arising from the elimination of double marginalisation and better fare combinability”, the airlines said in their application.
Maintaining competition
However, to address CCCS’ competition concerns, the airlines provided a list of proposed commitments, including maintaining seat capacity on an aggregated basis between the two airlines on the Singapore-Tokyo route – and vice versa – “at stipulated levels”.
They will also develop and submit a business plan detailing growth figures that they deem feasible to achieve when “certain trigger factors” are conjunctively met.
Both airlines will also report the flight schedules and individual capacity levels operated by their low-cost carriers on the same routes. This will allow CCCS to monitor whether capacity has been shifted from these low-cost carriers to the full-service airlines.
SIA and ANA also intend to appoint an independent auditor to monitor compliance and submit a report to CCCS on an annual basis.
Watchdog’s assessment
In response, CCCS said it conducted a market testing exercise from Jan 10 to 22, 2025, to assess whether these commitments would sufficiently address the competition concerns arising from the proposed cooperation.
“Most stakeholders did not raise concerns with the proposed commitments,” it said, adding that two stakeholders provided suggestions for “refinement”.
“After evaluating the feedback provided, CCCS considered the proposed commitments to be sufficient to mitigate the competition concerns arising from the proposed cooperation,” the watchdog said.
SIA and ANA in January 2020 announced they had signed a joint venture (JV) framework agreement that would provide customers with “enhanced flight connectivity and access to a wider network”.
The JV would allow SIA and ANA to “further strengthen their cooperation on services between Singapore and Japan, as well as in key markets including Australia, India, Indonesia and Malaysia”, a statement from SIA said then.
The two airlines made their first application to CCCS in June 2021 and submitted an updated application in July 2023 after market data signalled “a degree of market recovery” from the Covid-19 pandemic.
Last April, Japan’s Ministry of Land, Infrastructure, Transport and Tourism approved their plans.
SIA shares closed flat at S$6.80 on Friday.
