SIA, Malaysia Airlines deepen partnership

Singapore Airlines (SIA) and Malaysia Airlines Berhad (MAB) signed an MOU June 27 to enhance the partnership between the two airline groups.

The scope of the deal will expand existing codeshare arrangements between the two countries and will possibly include codesharing beyond Singapore-Malaysia routes. Other potential cooperation between the carriers could also cover cargo and MRO services.

Subject to regulatory approvals, the deal will be finalized in the “coming months,” the airlines said in a joint statement. The agreement will also include SIA subsidiaries Scoot and SilkAir, and MAB subsidiary Firefly. SIA is a Star Alliance member, and MAB is in oneworld.

An SIA spokesman said “specific details” of the agreement will be revealed when it is finalized. However, he did confirm it will not involve investment by SIA into MAB.

“SIA and MAB operate in a region with a rapidly growing air travel market, presenting significant growth opportunities for both carriers,” SIA CEO Goh Choon Phong said. “Both airlines have extensive operation within ASEAN, as well as large networks that cover many other parts of the world.” The deal will “increase global connectivity for Malaysia and Singapore,” he added.

Singapore-Kuala Lumpur is the world’s busiest international air route, with over 27,800 seats weekly between the two airline groups.

“MAB needs many more tie-ups to stay alive. However, SIA is likely to gain more as it has a bigger market and network with very deep pockets,” aviation analyst and Endau Analytics founder Shukor Yusof said. “It could also give SIA the opportunity to cut costs in cargo and MRO.”

The SIA deal is the second partnership MOU signed by MAB in recent months. In May, MAB and Japan Airlines (JAL) revealed their intention to form a metal-neutral joint business agreement (JBA), expanding an existing codeshare relationship between the two oneworld alliance partners.

MAB CEO Izham Ismail told ATW  June 2 the JAL deal is “strategically important” and represents the first JBA for the Malaysian carrier. However, he said MAB wanted to form more partnerships and was in discussions with a few other airlines.

Partnerships are a key part of MAB’s turnaround effort, Izham said.

Source: Atwonline.com

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