SINGAPORE: National carriers Singapore Airlines (SIA) and Malaysia Airlines (MAS) on Thursday (Jun 27) signed a preliminary agreement that could see them "significantly" expand codeshare flights.
Under the terms of the memorandum of understanding, SIA and MAS will explore a "wide-ranging strategic partnership" to build on their existing codeshare agreement, the airlines said.
This could include a significant expansion of codeshare flights beyond Singapore-Malaysia routes, as well as enhancements on the frequent flyer programme front and potential cooperation in cargo and maintenance services.
A formal agreement is expected to be finalised in the coming months. subject to regulatory approvals, and will include SIA subsidiaries SilkAir and Scoot as well as MAS' sister airline Firefly.
READ: ‘We’re not perfect’: Scoot seeks to regain customer confidence after recent major flight disruptions
The agreement presents "significant growth opportunities for both carriers", said SIA chief executive Goh Choon Phong, adding that the deal will increase global connectivity for Malaysia and Singapore and enhance its service offerings to customers.
MAS’ chief executive officer Izham Ismail said: "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.
"Via this partnership, we look forward to adding more value to the customer proposition."
The cooperation between the airlines, which split out from Malaysia-Singapore Airlines in 1972, comes amid financial trouble at MAS.
The Malaysian government is considering whether to shut, sell or refinance the loss-making national carrier, Prime Minister Mahathir Mohamad said in March.
Shukor Yusof, the head of Malaysian aviation consultancy Endau Analytics, said between the SIA deal and a recent joint venture agreement with Japan Airlines, there appeared to be little chance the government would sell its national carrier.
"Malaysia Airlines needs as many tie-ups as possible to stay alive," he said. "That said, Singapore Airlines is likely to gain more having a bigger, wider market and network and more importantly, deeper pockets."
CAPA Centre for Aviation Chief Analyst Brendan Sobie said the stronger partnership would allow SIA to increase its presence in the strategically important Malaysian market and help MAS compete more effectively against rivals such as AirAsia Group.
"This will naturally start speculation that Singapore Airlines could be the white knight strategic investor that Malaysia Airlines needs and the Malaysian government has been advocating for, but there would be so many challenges that would need to be overcome to make that a serious option," Sobie said.