SIA acquisition of Tiger Airways cleared for takeoff by competition watchdog

The Competition Commission of Singapore (CCS) on Friday (Nov 28) cleared the proposed acquisition of Tiger Airways Holdings by Singapore Airlines (SIA). CCS concluded that the transaction would not infringe the Competition Act as the ailing budget carrier is likely to exit its operations without the acquisition.

SIA is already the biggest shareholder in the Singapore-based budget carrier and will raise its stake in Tigerair from 40 per cent to 56 per cent. This means Tigerair will become a subsidiary of SIA.

Earlier this month, SIA had said there are no plans for a full takeover of Tigerair, but it did not rule out the possibility of such a move in the future. SIA already has another low-cost airline subsidiary, Scoot.

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SIA's mooted Tigerair takeover: Competition watchdog calls for public feedback

The Competition Commission of Singapore (CCS) is seeking feedback on the proposed acquisition of additional shares in Tiger Airways (Tigerair) by Singapore Airlines (SIA).

CCS on Friday (Oct 24) said it received notification from the two carriers on the proposed deal a week ago. On Oct 17, Tigerair had reported an after-tax loss of S$182.4 million for the fiscal second quarter and said it will raise up to S$234 million via a rights issue.

SIA is already the biggest shareholder in the Singapore-based budget carrier and is seeking to raise its stake in Tigerair from 40 per cent to approximately 55 per cent. If the deal goes through, it would make Tigerair a subsidiary of SIA, on top of the Singapore flagship carrier's low-cost airline Scoot.

More information can be found at ccs.gov.sg. The closing date for the submission of feedback is Nov 7.

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Scoot and Tigerair proposed alliance cleared

The way looks clear for budget airlines Scoot and Tigerair Singapore to extend their partnership. According to both carriers, they have obtained the green light from the Competition Commission of Singapore (CCS) on Friday (Aug 8).

The two carriers have been granted anti-trust immunity, which will allow closer cooperation in scheduling, pricing, sales and marketing and other matters.

Scoot is a wholly owned unit of Singapore Airlines (SIA) while Tiger lists SIA as its largest shareholder. Tigerair focuses on shorter-haul journeys, while Scoot's emphasis is on medium to long haul routes. The two carriers first announced a partnership in October 2012.

Earlier this year, they sought clearance from the CCS for the alliance to enter a second phase. According to the CCS, both airlines operate largely complementary networks of flights.

The competition watchdog says although some parts of the proposed cooperation would raise competition concerns, these would be offset by resulting net economic benefits to Singapore passengers.

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Joint ventures between airlines result in consumer benefits: CCS

A recent market study on the aviation industry in Singapore has found consumer benefits resulting from joint ventures between airlines.

The Competition Commission of Singapore (CCS) had commissioned the study, which focused on two joint ventures in particular -- the agreement between Japan Airlines and American Airlines and the one among United Airlines, Continental Airlines and All Nippon Airways.

In a statement on Tuesday, CCS noted that airline joint venture agreements are inherently anti-competitive, as they typically involve price fixing, market sharing or output limitation.

But it said there is a need to carefully assess such agreements, as they can sometimes generate substantial benefits to consumers, such as lower airfares, more choices in connectivity and better service.

When an agreement generates such benefits, CCS may grant it anti-trust immunity.

The study, which was carried out by external consultants ICF SH&E, found that the two joint ventures have resulted in higher passenger numbers and lower fares.

But the improvements were smaller than those reported in Western literature on airline joint ventures in the US and Europe.

In particular, the significant drop in passenger fares found in literature based on US flight data were not replicated in the joint ventures formed in, or operate in, Singapore and the Asia Pacific region.

Still, the agreements resulted in other benefits such as improved flight schedules and increased capacity.

CCS said to date, it has reviewed eight airline joint ventures agreements, with the consideration that any substantial lessening of competition should be carefully weighed against the extent of consumer benefits that the agreement may generate.

It said it will continue to monitor developments in the aviation market in Singapore.

More information on the study may be found at the CCS website.

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CCS seeking feedback on planned SIA-Air New Zealand tie-up

The Competition Commission of Singapore (CCS) is seeking public feedback on a proposed strategic alliance between Singapore Airlines (SIA) and Air New Zealand as the agreement could restrict competition on air travel between the two countries.

In a media release, CCS said it received a notification on 30 January about the proposed strategic alliance between SIA and Air New Zealand.

Earlier in January this year, both airlines announced plans for a tie-up which will enable SIA to operate its Airbus A380 superjumbos to New Zealand for the first time, progressively replacing daily services using the smaller Boeing 777-300ER.

Air New Zealand will launch daily services between Auckland and Singapore. SIA's daily Singapore-Christchurch service will continue as part of the alliance.

Besides SIA and Air New Zealand, other airlines that connect Singapore and New Zealand include Qantas's budget unit Jetstar and Malaysia Airlines.

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