Singapore Airlines welcomes greater liberalisation in Southeast Asia, as this would improve capacity allocation and allow greater more merger activity.
“From a perspective for the industry and for the convenience of passenger travel, obviously a fully liberalised ASEAN aviation market is very much welcomed,” says Singapore Airlines chief executive Goh Choon Phong.
“Then you can ensure that if there is demand, carriers from any part of ASEAN can actually be able to deploy the resources to fulfill the demand.”
While carriers may not always have spare demand to take advantage of opportunities, he continues, an environment that allows more liberal deployment of aircraft capacity would improve efficiency and be better for passengers.
Goh was responding a question about protectionism concerns in ASEAN, a grouping of Southeast Asian nations that includes Singapore. While the grouping has a so-called “open skies” accord, there are significant restrictions on how the region’s airlines can operate. Foreign ownership in overseas carriers is proscribed.
Carriers that want ownership of other carriers in the region are obligated to own minority stakes through joint ventures.
Singapore Airlines has stakes in overseas carriers as Thai long-haul, low-cost carrier NokScoot, in which it holds 49% via its Scoot unit, and Indian full-service carrier Vistara, in which it also holds 49%.
“We would also welcome what is going on in Europe, where they allow a much more liberal regime around mergers and acquisitions,” says Goh. "So you can see how Lufthansa, Air France-KLM, and IAG have grouped together and been able to provide some consolidation. I think that would also be a welcome development.”
When pressed on how possible a European-style airline market could happen in Southeast Asia, Goh was unable to forecast when, or if, it will come to pass.
“How long it takes to reach that, I do not know, but the more liberal the aviation environment is in this part of the world, the better it is for our travelling public. So that should be something, hopefully, we will work towards.”