Singapore Airlines, Malaysia Airlines sign codeshare pact

(Reuters) - Singapore Airlines SIAL.SI and Malaysia Airlines finalised a wide-ranging agreement to codeshare on more routes between the southeast Asian neighbours and elsewhere, the companies said on Wednesday.

Malaysia Airlines planes are pictured at Kuala Lumpur International Airport in Sepang, Malaysia, July 2, 2019. REUTERS/Lim Huey Teng/Files

The cooperation between the carriers, which split out from Malaysia-Singapore Airlines in 1972, comes amid financial trouble at Malaysia Airlines.

The deal provides for Singapore Airlines and its unit, SilkAir, to codeshare on 16 domestic locations with Malaysia Airlines, while allowing the former to codeshare on flights to Europe, South Africa, among other destinations.

“Subject to regulatory approvals, the codeshare flights will be progressively made available for sale through the airlines’ respective booking channels in key markets,” the carriers said in a joint statement.

Malaysia Airlines this month announced a codeshare arrangement with British Airways for 14 destinations.

Last week Malaysia said it had shortlisted four potential investors for strategic partnership with the national carrier.

The Malaysian national carrier said it is strengthening its operations and internal management via cost-cutting and service improvements, as well as strengthening code-sharing pacts and joint ventures with other airlines to stay competitive.

Sovereign wealth fund Khazanah Nasional [KHAZA.UL] took a hit last year, with almost half of its impairment of 7.3 billion ringgit ($1.75 billion) stemming from sustaining the national carrier.

Ties between the neighbours after Singapore’s 1965 split from Malaysia have occasionally been strained.

The most recent dispute centred on maritime borders and air space between the city state and Malaysia’s southernmost state of Johor. The countries agreed in January to take steps to reduce tension.

Reporting by Nikhil Kurian Nainan in Bengaluru and Fathin Ungku in Singapore, Editing by Louise Heavens