Frequently Asked Questions

On 25 September 2007, The Minister for Trade and Industry issued an Exclusion Order to exclude the Air Shuttle Service Operation Agreement between MAS and SIA on the Singapore-Kuala Lumpur sector ('Singapore-KL Shuttle Agreement'), from Section 34 of the Competition Act (Cap. 50B) ('Act') which prohibits business agreements that prevent, restrict or distort competition.

The Competition Act allows the Minister for Trade and Industry to exclude agreements (or agreements of a particular description) from the Section 34 prohibition in specific situations. One such situation is if the Minister is satisfied that it is appropriate to exclude an agreement to avoid a conflict between the Act's provisions and an international obligation of Singapore, or an international arrangement relating to civil aviation (as in the present case).

The Shuttle Agreement is a commercial agreement between Malaysia Airlines (MAS) and Singapore Airlines (SIA) to jointly operate an air shuttle service between Singapore and Kuala Lumpur. Under this shuttle service, passengers have the flexibility to purchase a ticket for the next available flight to Singapore/Kuala Lumpur (as the case may be) without any prior booking. This is akin to a shuttle bus service. The two airlines implement this service by integrating their capacity, charging a common fare and coordinating their flight schedules so that the flights are both frequent and spaced out at regular intervals throughout the day.

The Exclusion Order does not necessarily mean that the Shuttle Agreement is, or will be found to be, anti-competitive. The Order merely excludes the Agreement from the purview of the Competition Act and the Competition Commission of Singapore, thus removing any risk that the Agreement may be found to be in contravention of the Act.