Anti-Trust immunity pact on cards for Singapore Airlines, Vistara

MUMBAI: Singapore Airlines and Vistara are now working on an anti-trust immunity (ATI) agreement — the next big step to the Indian joint venture’s plans to fly abroad — that will help both airlines extract greater operational synergies.

“Deeper synergies in international operations with Vistara will only be possible with an ATI agreement. That is being worked upon right now. But it's still in its initial stages,” David Lim, general manager, India for Singapore Airlines, told ET in an interview.

In the absence of such an agreement, the two airlines would be competitors in the international space and can't align inventories and services to capture the synergies. The agreement would allow the carriers to access each other's ticketing services, match flight timings to build connections, and align networks.


“We already have close to 20 interline partnerships with leading global airlines, including with Singapore Airlines and SilkAir. We will continue to explore more potential cooperation opportunities as we spread our wings further,” said a spokesperson at Vistara.

The airline, a joint venture between Singapore Airlines and Tata Sons, plans to start international operations in the second half of 2018. It will get its 21st plane in May. Indian regulations require an airline to have a fleet of 20 aircraft before it is considered for overseas operations.
SIA and its affiliates Silk Air and Scoot currently operate about 140 flights to India.

It isn't clear whether Vistara would have separate ATI agreements with each group affiliate. But such an agreement with Singapore Airlines group would give it combined offer connections to 103 destinations in 35 countries. Scoot connects to 64 destinations in 17 countries.

For Singapore Airlines, it would give further access to India's air traffic--one of the fastest growing in the world--as Vistara expands its network. “This is a very positive development and great for Vistara and Singapore Airlines to protect each others’ markets. This would mean long-standing benefits for both airlines and strengthen the partnership,” said Mark Martin, founder of Dubai-based consultant Martin Consulting.

"For Singapore Airlines, the underlying principle always has been a hub and spoke model. This will give it further access to India's growing air traffic. For Vistara, it will be access to SQ's widespread international network," said Vihang Virkar, partner at PDS Legal.
"Also, an ATI can be expansive

and cover several aspects. For example Vistara may be able to save costs on setting up bases in the international destinations it flies to. There may be component support agreements wherein Vistara gets the price benefits that SQ would get. There may also be benefits on leasing in terms of easier security deposits," he added.