Search

 

Cablegate: Singapore-Kuala Lumpur Air Route Excluded From Competition

VZCZCXRO3114
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #1825 2741034
ZNR UUUUU ZZH
R 011034Z OCT 07
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 4137
INFO RUCPDOC/USDOC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEHKL/AMEMBASSY KUALA LUMPUR 4648
RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SINGAPORE 001825

SIPDIS

STATE PASS USTR FOR AUSTR WEISEL AND DAUSTR DBELL
COMMERCE FOR JBAKER

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EIAR ETRD ECON EINV SN MY

SUBJECT: Singapore-Kuala Lumpur Air Route Excluded From Competition
Act

REF: SINGAPORE 469

NOT FOR INTERNET DISTRIBUTION

1. (U) The Ministry of Trade and Industry (MTI) issued an order on
September 25, 2007 excluding the 1982 Air Shuttle Service Operation
Agreement (ASA) between Singapore Airlines and Malaysia Airlines
from the Competition Act. MTI cited in its decision a section of
the Competition Act that states certain anti-competitive agreements
may be excluded "in order to avoid a conflict between the provisions
of (the Act) and an international obligation of Singapore."

2. (U) Section 34 of the Competition Act aims to prohibit, inter
alia, price fixing and market limitations. However, MTI's exclusion
allows the two airlines to continue to coordinate scheduling on the
Singapore-Kuala Lumpur route without fear of contravening the Act.
(Note: The ASA created a duopoly on that route. End note.) In
explaining its decision, MTI also noted that the ASA only allows for
limited air traffic between Singapore and Kuala Lumpur. MTI claimed
that should Singapore Airlines and Malaysia Airlines not be able to
coordinate scheduling, the number of flights between the two cities
could be reduced, harming customers.

3. (SBU) Comment: Despite professing a commitment to liberalized
air markets, this decision marks the third instance the GOS has
exempted a potentially non-competitive agreement from the
Competition Act (reftel). That Singapore's national carrier stood
to lose its share of a lucrative duopoly is probably relevant to
MTI's decision. The decision will likely merely postpone the
inevitable, as an ASEAN agreement will allow unlimited travel
between the organization's capitals by 2009. However, the GOS owns
shares in at least three regional and low cost carriers, ensuring a
continued stake in the action even as Singapore Airlines
(presumably) loses business on the Singapore-Kuala Lumpur route.
End comment.

SHIELDS

© Scoop Media

 
 
 
World Headlines

 



UN: Bachelet Calls On Mexico To Step Up Efforts As Tragic Milestone Reached Of More Than 100,000 Disappearances

UN High Commissioner for Human Rights Michelle Bachelet on Tuesday called on the Mexican authorities to step up efforts to ensure truth and justice for victims of disappearances, who now number more than 100,000, according to official data... More>>


ADC: Statement On The Assassination Of Shireen Abu Akleh

Early this morning in Jenin, Occupied Palestine, revered Palestinian voice Shireen Abu Akleh, a Palestinian American journalist for Al Jazeera, was assassinated by Israeli Occupation Forces snipers...
More>>



Ukraine: UN Rights Office Probe Spotlights Harrowing Plight Of Civilians

Almost 76 days since Russia invaded Ukraine, countless civilians remain caught up in the horror and destruction of war, UN rights investigators said on Tuesday... More>>



Access Now: Elon Musk’s Twitter Buyout Must Not Come At The Expense Of Human Rights

Following today’s announcement that Elon Musk will acquire complete ownership of Twitter in a cash sale of around 44 billion USD, pending shareholder approval, Access Now urges Twitter’s Board, employees, and shareholders... More>>



UN: Biodiversity And Ecosystem Protection Highlighted On Mother Earth Day

Marking International Mother Earth Day, UN General Assembly President Abdulla Shahid urged on Friday, for collective action to safeguard biodiversity and protect ecosystems... More>>

Ukraine: Hundreds More Reach Safety After Fleeing Besieged Mariupol
In Ukraine, humanitarians said on Wednesday that hundreds of people have managed to reach safety after fleeing Mariupol, where there’s also been condemnation for the killing of Lithuanian filmmaker Mantas Kvedaravicius... More>>