SINGAPORE (June 27): Singapore Airlines (SIA) and Malaysia Airlines Berhad (MAB) on Thursday inked a Memorandum of Understanding (MOU) to explore a wide-ranging strategic partnership to build on their existing codeshare agreement that covers flights between Singapore and Malaysia.
The enhanced ties between the duo could include a significant expansion of codeshare flights beyond Singapore-Malaysia routes, as well as enhancements on the frequent flier programme front.
Other potential co-operation could involve cargo and maintenance, repair and overhaul services.
However, these are subject to obtaining the necessary regulatory approvals.
The two groups intend to finalise a formal agreement in the coming months. This will then include SIA’s subsidiaries SilkAir and Scoot, as well as MAB’s sister airline Firefly.
Izham Ismail, group CEO of MAS says, “Malaysia Airlines has always historically had strong commercial and cultural links with Singapore Airlines. My team and I are extremely pleased to be able to build on that close relationship even further, this time across many areas of both airlines’ ecosystems.”
Goh Choon Phong, CEO of SIA says, “Both Airlines have extensive operations with ASEAN, as well as large networks that cover many other parts of the world. We are proud to announce this MOU to expand the scope of our cooperation, increase global connectivity for Malaysia and Singapore, and enhance our service offerings for our customers.”
The 296km Singapore-KL air route may be one of the shortest in the world. But with eight carriers operating this route with an average of 82 flights a day, the Singapore-KL route is the world’s busiest international air link for the second year running.
Earlier in May this year, Maybank Kim Eng analyst Mohshin Aziz said that both airlines should consider a merger if both airlines want to improve their earnings. “A merger between them will see a lot of improvements in terms of scheduling. Besides, relocation of assets can also be optimised,” he said. However, the brokerage quickly disavowed his comments, claiming that the merger suggestion wasn’t the house view and was merely Mohshin’s personal opinion. Both flag carriers can trace their roots to the same entity half a century ago.
Shares in SIA closed at $9.30 on Thursday.
