Ties that bind MAS and SIA


It was a sentimental occasion. That was how Singapore Airlines (SIA) chief executive officer Chew Choon Seng described the signing of the code-share agreement with Malaysia Airlines (MAS). 

To him it was an effort of cooperation between two carriers that have “common roots’’. 

Even when Malaysia and Singapore had become separate sovereign nations, they operated a common airline – Malaysia-Singapore Airlines or MSA. It was not until 1972 that they went their separate ways with the formation of MAS and SIA. 

After they parted ways, they slugged it out in regional and global markets, like archrivals, all with a view to gain greater market share. 

Both operate in more than 100 countries, have established their own identities and have respectively won many awards over the years. 

Now, the two airlines are coming together again to help each other as globalisation and freed trade will bring heightened competition from other airlines over the next few years. 

The code-share accord also points to an appreciation between the two countries that cooperation in various sectors can be mutually beneficial. 

The body language of both the CEOs (Chew and MAS managing director Datuk Ahmad Fuaad Dahlan) at the signing showed a picture of cordiality in their relationship and both are committed to making this new relationship bloom. 

Some MAS senior officials at the signing call it the “enhancing of ties’’. 

The one sector that both MAS and SIA can take pride in is the KL-Singapore sector. This is Asia’s most protected and fourth busiest where more than two million passengers ply the route in a year. 

Although operating as rivals, both airlines have managed to make good profits on this route for the past two decades. But this sector is likely to open up in 2008 in line with the open-skies policy. 

Sabah and Sarawak have also often been seen as a lucrative route as there are limited flights to the two big states. Although SIA had flown to Kota Kinabalu sometime ago, that was ceased due to low load factors. 

To share means there will be a lot more marketing activity by all the three parties that signed the accord. Perhaps the Sabah and Sarawak routes from Singapore can emulate the successes of the KL-Singapore one. 

The beneficiaries to this success are many. Not just the airlines but also the tourism and retail industries. The airport operators would collect more airport taxes as SilkAir gets new rights to fly into Kuching and Kota Kinabalu. This are early days as there could be more routes for it. Kuantan is an option. 

SIA and its unit SilkAir help bring more tourists into Malaysia. Singaporeans or even international passengers now have wider options and more connectivity when flying between the two countries. 

SIA and SilkAir also get a headstart into newer markets before the playground gets crowded when open skies is implemented in Asean. 

The agreement potentially means more business for all the parties involved. It may also lead to better services, greater connectivity and cheaper airfare for consumers. 

 MAS :  [Stock Watch]  [News]

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