ANA & Singapore Expected To Form Joint Venture

Filed Under: ANA, Singapore

Ah, now this could be interesting, and possibly explain the claims that Singapore Airlines will launch a Tokyo to New York flight.

ANA & Singapore rumored to be finalizing joint venture

Nikkei Asian Review is reporting that All Nippon Airways and Singapore Airlines may announce a new joint venture as early as this month, with the partnership going live in 2021 (due to the government approval required for these partnerships).

While current joint ventures between the airlines involve intercontinental routes, this joint venture would cover flights within Asia. This is obviously a highly competitive market that’s growing, and both airlines offer substantial service between Japan and Singapore, and beyond.

This would be All Nippon Airways’ third joint venture, after their joint ventures with United (to the US) and Lufthansa (to Germany). Meanwhile Singapore Airlines has a joint venture with Lufthansa (to Germany) as well.

ANA & Singapore wouldn’t be the first Japanese & Southeast Asia airlines to hook up — Japan Airlines and Malaysia Airlines entered a joint venture recently, which geographically is similar.

All Nippon Airways 777-300ER

What is a joint venture?

For those of you not familiar, a joint venture is the highest level of cooperation you can have between two airlines.

When airlines form a joint venture they coordinate pricing and schedules in a given market, and have a revenue sharing agreement. Exactly how that revenue sharing agreement works depends on the specific situation, but the idea is that two airlines are essentially acting as one under a joint venture.

Note that typically airlines form joint ventures between specific regions, which is why this is different than an outright merger. That means airlines can only coordinate fares and schedules in specific markets.

From the perspective of a consumer, a joint venture is both good and bad:

  • The good news is that typically it gives you the most flight options in terms of schedules, since the airlines are operating as one; airlines also often try to make the experience as consistent across brands as possible
  • The downside is that it’s like a competitor being eliminated in the market, so it could lead to higher fares as it reduces competition

Singapore Airlines 777-300ER

Will Singapore Airlines launch Tokyo to New York flights?

Several weeks ago I wrote about how Japan’s Ministry of Land, Infrastructure, Transport and Tourism, granted Singapore Airlines permission to operate nonstop flights between New York and Tokyo. It was said that this would be offered in “cooperation” with All Nippon Airways, which left many of us confused.

Without a joint venture, ANA would have very little to gain with Singapore Airlines crowding the New York to Tokyo market even more. I think the details of this joint venture certainly give us more context as to the logic here, and the kind of cooperation that would allow that.

That being said, if this route were to launch, it’s highly unlikely the Tokyo to New York flight would be covered by the joint venture, since that’s a whole different region.

Nonetheless, it would make sense to see Singapore Airlines operate their one-stop New York to Singapore flight via Tokyo rather than via Frankfurt in the event that they were to beef up operations between Japan and Singapore, given the joint venture.

I’m still not 100% sure I fully get Singapore Airlines’ plans with the Tokyo to New York route, but a joint venture between the two airlines makes this more logical.

Singapore Airlines A380

Bottom line

Given how competitive the Asian market has become with the growth of low cost carriers, it’s not surprising to see more legacy airlines pursuing joint ventures.

The ANA & Singapore joint venture makes sense on the surface for travel between Japan and Southeast Asia.

Most interestingly from my perspective, though, it also provides somewhat of an explanation of why Singapore might be looking at flying from Tokyo to New York, which was a mystery prior to this.

What do you make of the rumored ANA & Singapore joint venture?

Comments
  1. Wouldn’t there be more of a market from Frankfurt to NYC rather than Tokyo though? Or does Lufthansa already have over capacity in the market?

  2. Hi Lucky,
    Sorry for the off-topic, but I’ve been seeing a few comments around the blog and totally agree with them.

    They have been mentioning about the images only loading when they scroll. This is really annoying when reading articles, especially trip reports.

    Are there any plans on going back to the old way please?

    Thanks

    Debbie.

  3. ANA and Singapore Airlines would dominate traffic between Singapore and Japan if this joint venture does eventuate. I wonder if they would have to give up Haneda slots for example, in the name of maintaining competitiveness in the market.

  4. If ANA and Singapore form a joint venture, Singapore will have to start upping their game to compete because at the moment ANA beat them on all fronts by a significant amount.

  5. I can’t imagine United would be happy about this, but ANA is probably looking for more capacity out of JFK vs EWR.

  6. I am not sure I see how this is a good idea. At first I was thinking this is great, I can fly ANA and SQ to and from Chicago and Singapore. Then I realized that UA and ANA already have a partnership for this route. Is SQ trying to limit flights through Haneda and Narita?

  7. @ Memento – but do you want to fly UA metal? And what if you want first class? How does Polaris compete with that?

  8. Lots of people in Singapore fly to NYC via other parts of Asia. I used to fly Cathay via HK. The HK to NYC flight was long. Given Singaporeans love their national carrier, it is another great option for them. Whilst you can earn “gold” star alliance status with partner airlines, you can only earn PPS status if you have an SQ flight number – so a codeshare with ANA would work. Having PPS status is a bonus as you jump to the front of the queue for flight changes (very useful when you travel a lot for work). I would also hope it means you can redeem Kris Flyer miles online for those flights.

  9. I was about to say I don’t see how this would ever get regulatory approval, but NH and LH somehow got their trans-Siberian JV approved even though it operates all but one of the nonstop flights between Japan and Germany, so I suppose anything is possible nowadays…

  10. @Andrew Agreed. TransPac business awards are rare on United, and either way I prefer Japan/Singapore carrier cabins than any US airline’s.

  11. ANA is reducing SIN TYO service to 1 daily.

    Maybe the simple fact of it all, is that ANA is suffering from chronic pilot shortage, and they know that SIN is a route that they can trust SQ to deliver great service.

    As for NRT-JFK, I suspect, that Vistara’s long haul network will be made of nonstop and one-stop options. I suspect, Vistara is going to try to realize Jet Airways’ expansion ambitions. Vistara could, potentially use Tokyo and London as scissor hubs. India will anchor itself on 7 mega cities: Delhi, Bangalore, Kolkata, Chennai, Ahmedabad, Goa-Pune (standing in for Mumbai) and Hyderabad, and these will need nonstops to LAX, SFO, SEA, BOS, EWR, IAD, ORD, MCO, ATL, DFW, RDU.

    Do not look down on NRT. It has, in many ways, taken over HKG’s role, with Chinese and Japanese airlines having basically launched 2000 weekly flights to Japan in the last few months. Watch Skymark’s rebirth at NRT: this may happen, if Seoul city government is unable to rally support to expand Gimpo. Gimpo was designed exactly like Haneda, which is designed to be a super compact airport capable of handling 200m pax if it comes to that.

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