One of the most compelling and competitive geographies out there for aviation, for long, has been the East Asian market. With the burgeoning influence of China, Singapore and India, the battle to capture the skies has been a strong and rigorous one. Accordingly, when it comes to surviving such a fierce competition and to serve a market where interconnectedness is of supreme importance, airlines have shown to tie up with their equivalents – like British Airways and Malaysia Airlines, such that their symbiotic association is stronger than the two airlines operating in the region individually.
Most recently, Singapore Airlines (SIA) and Al Nippon Airlines (ANA) have agreed to join forces in order to grow traffic and offer more flight options to respective customers. This tie-up shall significantly boost SIA’s foothold in the northeastern Asia. The agreement between the two shall go beyond the carriers’ current code-sharing, thereby, allowing them to coordinate schedules and fares. The deal is speculated to tale to the skies around 2021 after both airlines receive necessary antitrust exemptions, though no firm date has been stated by either airlines.
Image Credits: Airliners.net
While ANA anticipates to reap benefits from a close Star Alliance member, SIA sets its eyes on a substantial market share in the northeast Asian market. The tie-up of ANA with SIA marks it’s third joint venture after United Airlines and Lufthansa. This is the first occasion for ANA to tie forces with a Asian partner, which signifies the the heavy traffic and opportunities in Asia. The arrangement shall allow ANA customers to book itineraries with connections in Singapore without the need to buy separate tickets through SIA.
Image Credits: Airliners.net
So what makes this venture a special one? By regulations, code sharing does not allow carriers to adjust timetables or to cut fares in a coordinated manner to spur demand; these practices are banned under antitrust law. Thus, if approved, this venture could become first of its kind, allowing both airlines to share customers and revenue. Accordingly, the airlines could schedule flights and share resources such that customers are guaranteed a seamless experience.
As the competition stiffens in Asia, more partnerships and strategic collaborations are inevitable. As an exception, carriers like China Southern have quit alliances (The Airline quit SkyTeam Alliance in later half of 2019), however, the trend of majority of carriers has been to tie-up and top up! After Lufthansa tied up with Indian carrier Vistara, and Malaysia Airlines has partnered up with Singapore Airlines in October 2019, which airlines do you think are next up to co-work and indulge in a strategic collaboration? Let us know in the comments!
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Singapore Airlines ties forces with Al Nippon Airways, by Travel Radar Correspondent Ankur Deo
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