TOKYO – All Nippon Airways (ANA) and Singapore Airlines (SIA) are expected to enter a comprehensive tie-up as this month aimed that will ensure both airlines grow their footholds in respective Southeast Asia and Northeast Asia.
The joint venture will extend beyond the carriers’ existing code-sharing agreement where they coordinate schedules and fares, Nikkei Asian Review reported. The arrangement is expected to launch around 2021, once the airlines receive the necessary exemptions.
This joint venture marks the Japanese carrier’s first such tie-up with an Asian partner, and its third overall with partners United Airlines and Lufthansa.
Under the current code-sharing arrangement, ANA and SIA are allowed to market seats on the other carrier’s flights. This means, for example, that ANA customers can book itineraries with connections in Singapore without having to buy separate tickets through Singapore Airlines.
But code-sharing does not enable carriers adjust flight timetables to make such connections easier, nor fare-cuts in a coordinated manner to spur demand, both of which are considered forms of collusion and banned under antitrust law.
If approved, the joint venture will allow for such cooperation, as well as let the carriers share revenue.
The International Air Transport Association (IATA) is projecting the number of passengers in Asia Pacific to grow by about 150% over two decades to 3.9 billion in 2037, representing to a 4.8% annual growth, faster than any other region.
The growing competition in the region have been spurred by the growth of low-cost carriers, who have staked a bigger share of international travel in Indonesia and Malaysia, which Middle Eastern players such as Emirates and Qatar Airways are gaining ground in Asia-Europe flights.
This past spring, Japan Airlines and Malaysia Airlines, both members of the Oneworld alliance, have entered a joint venture that cooperate commercially on flights between Malaysia and Japan. The partnership was given the greenlight in December following a decision to grant an individual antitrust exemption.