Boeing-SIA JV gets CCI green signal

Boeing Singapore, an arm of US major Boeing Company, and SIA Engineering Company's proposed joint venture has got the approval from fair trade regulator CCI, as the deal does not raise anti-competition concerns in the country.
Under the proposed combination, Boeing Singapore would hold 51 per cent stake in the Singapore-based joint venture company, while 49 per cent would be with SIA Engineering Company Ltd (SIAEC) -- a subsidiary of Singapore Airlines.
The joint venture company would offer maintenance, repair and overhaul (MRO) services together with related engineering, logistics and supply chain and inventory management services in South Asia Pacific region, including India, with respect to certain aircrafts manufactured by the Boeing Company.

In an order released today, CCI said that "the proposed combination is not likely to have an appreciable adverse effect on competition in India".
CCI noted that the Boeing Company did not have arrangement with any of the Indian carriers or the MRO service providers in the country and that post combination "Indian carriers using Boeing aircrafts will be free to procure MRO services from any MRO service provider".
Further, the Boeing Company will not be prevented from supplying spare parts or technical support to MRO service providers in India.

The Commission said that the assessment with respect to the joint venture was limited to the effect of the proposed deal on two market segments -- heavy maintenance and component maintenance. These segments fall under MRO services.

"It is observed that in both of the said segments of MRO services, the parties have no presence in India since neither the Boeing Company nor SIAEC provides any MRO services in India," CCI said in the order.
Observing that the Boeing Company, through its group companies, has provided adhoc services to Indian carriers outside India, CCI said the revenues from such services were "insignificant".
It also noted that several Indian players were "active in both these segments and have a significantly larger market share vis-a-vis the parties".
As per details in the order, post the combination, Boeing and SIAEC would "novate contracts" to the joint venture related to MRO services.

Following an agreement over the joint venture in July, this year, the companies had approached CCI for its green signal in August.
Boeing Singapore is currently engaged in the field of fleet management solutions, while SIAEC is into the business of provision of MRO services for aircraft, engines and related components.