Vistara (UK, Delhi International) and its 49% owner Singapore Airlines (SQ, Singapore Changi) have signed a Commercial Cooperation Framework Agreement that seeks - subject to regulatory approval in Singapore - to jointly operate 16 routes that the two carriers currently ply separately.
The deal will strengthen an existing codeshare partnership in effect since 2017 by "harmonising efforts in capacity planning, sales, marketing, joint fare products, customer services, and operations," the airlines outlined in a statement on December 7. India's Tata Sons empire holds the other 51% in Vistara.
Bolstering the partnership "will allow both airlines to achieve further synergies on services between Singapore and India as well as in the key regions of Southeast Asia, Australia, and New Zealand," the statement summarised, adding that this would be important as the industry recovers from the coronavirus crisis as connectivity is "restored in a gradual and calibrated manner in tandem with demand."
The partners submitted their pact to the Competition and Consumer Commission of Singapore (CCCS), which has subsequently sought public feedback on whether it could adversely affect fares. Any concerns that fewer flights may affect ticket prices or seat capacity can be submitted to the body by December 21, it said.
The watchdog outlined in a statement dated December 8 that it had received the application on November 30 and was now assessing whether the proposed cooperation would infringe section 34 of the city-state's Competition Act.
The deepening ties would cover 16 routes that the two airlines currently operate separately. Overlapping direct routes comprise Singapore Changi to Delhi International and Singapore-Mumbai International, while overlapping non-direct routes include routes between Singapore and Ahmedabad, Amritsar, Bhubaneshwar, Bengaluru International, Chennai, Goa Dabolim, Guwahati, Hyderabad International, Kochi International, Kolkata, Lucknow, Port Blair, Thiruvananthapuram, and Varanasi.
Vistara and Singapore Airlines initially forged their extended agreement in February, before the pandemic hit the industry. The proposed cooperation would include SIA subsidiaries SilkAir (SLK, Singapore Changi), which is to be integrated into Singapore Airlines over the coming years, and potentially low-cost unit Scoot (TR, Singapore Changi), the CCCS said.
Vistara and Singapore Airlines told the watchdog that their combined market share was "not significant" on the overlapping routes; that there is unlikely to be "any actual adverse effect on competition" on passenger volumes on the Bhubaneswar, Goa, Guwahati, and Port Blair routes; that "many competitors exist" on the overlapping routes; and that barriers to entry on the routes are low for any potential competitors.
They also claimed the deal would result in "significant consumer and economic benefits" in the shape of "an expedited and more sustainable reinstatement of capacity" in the current Covid-19 environment and improved connectivity for Singapore and India.
Vistara does not currently fly to Singapore, but it launched daily routes in August 2019 from both Delhi and Mumbai before the pandemic. Singapore Airlines operates presently to Chennai (2x weekly), Bangalore (1x weekly), and Delhi (1x weekly), the ch-aviation capacities module shows. The other players with routes between India and Singapore at the moment include Air India (Bangalore, Chennai, Delhi, Mumbai) and IndiGo Airlines (Chennai, Mumbai, Tiruchirapally).
