Etihad, Jet Airways seek green light to launch partnership

Etihad, Jet Airways seek green light to launch partnership
The lobby of a new A-380 aircraft belonging to Etihad Airways. The proposed tie-up between Abu Dhabi-based Etihad Airways and Indian carrier Jet Airways is aimed at streamlining both airlines' operations.

Two airlines are seeking permission from Singapore's competition watchdog to launch a partnership which would see them coordinate fares, flight schedules and other operations in a move they say will benefit travellers.

Abu Dhabi-based Etihad Airways and Indian carrier Jet Airways are also looking to team up their marketing and customer service efforts, according to the Competition Commission of Singapore's website.

Both carriers, which operate in Singapore, intend to enter into a code-share deal, which means one airline can sell seats on the other's flights.

The commission has invited feedback on the proposal from interested parties, including rival carriers.

The proposed tie-up aims to streamline both airlines' operations by sharing resources, lowering administrative costs and improving administration.

The commission said that this is aimed at increasing competition for air passenger services and enhancing passenger choice, through connecting the networks of the two airlines.

To cope with intensifying competition in a business hit by high fuel costs and low yields, airlines are increasingly forming partnerships and alliances. In some cases, this has involved taking stakes in other carriers. Jet Airways, for example, has agreed to sell a 24 per cent stake to Etihad.

Both carriers have written to competition watchdogs in other markets where they operate to seek similar anti-trust immunity.

Aviation analysts expect the commission, which last year carried out a study on the impact of airline link-ups, to say yes to the proposed alliance. While such alliances are inherently anti-competitive, they do more good than harm, it said in April.

A spokesman told The Straits Times then that joint venture agreements usually see airlines cooperating instead of competing in various aspects. But these can generate "substantial benefits" for consumers, such as lower airfares, better service and greater choice in terms of flight connections.

Interested parties have until July 11 to submit their views on the proposal.

This article was first published on June 21, 2014.
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