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Singapore competition watchdog zooms in on airline alliances

The Competition and Consumer Commission of Singapore (CCCS) has released a new guidance note addressing airline alliance agreements. Through the move, the CCCS looks to increase the ease of self-assessment of airline alliance agreements and streamline the review process by providing a timeline.

The move also comes as the competition watchdog sees an increase in the number of airline alliance agreements being received for decision. The note targets airline alliances, which are able to enhance operational efficiencies and provide benefits to travellers through more seamless experiences and lower airfares.  That being said, some airline alliances can also potentially restrict completion, resulting in fewer options and higher fares.

CCCS’ guidance note looks to assist airlines in their self-assessment process on whether or not their alliance agreements with one another would breach Section 34 of the Competition Act (Cap. 50B), which prohibits anti-competitive agreements in Singapore.

It also looks to help airlines determine whether or not their alliance would generate economic benefits that would outweigh competition concerns before notifying the CCCS for guidance or decision.

The guidance note highlights the procedural and substantive issues commonly encountered during a CCCS review. This includes when a notification should be filed, basic information needed for the notification, as well as options to offer commitments to address potential competition concerns, amongst others.

The airline guidance note follows public consultations held from 22 January 2018 to 12 February 2018, which included a roundtable discussion on 30 January 2018. This was with competition law and economics practitioners, industry stakeholders, as well as relevant government agencies including the Ministry of Transport and the Civil Aviation Authority of Singapore.

“Over time, needs can change.  Situations can evolve.  So it’s helpful to review regulations from time to time.  When regulation becomes more efficient, it reduces compliance costs for businesses,” Tan Wu Meng, senior Parliamentary secretary for trade and industry and foreign affairs, said.

(Photo courtesy: 123RF)

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