Singapore – Air Services International (ASI) and Pacific Arena have sealed an agreement that will see the corporate travel management arms of both companies working together, with a potential eventual merger or cross equity holding between the two companies in future.

If the two merge, the entity would probably be within the top 10 corporate travel management agencies in Singapore in terms of size and annual sales turnover.

The combined annual sales turnover now is S$70 million (US$41 million).

Under the current agreement, both parties would align their business practices including purchasing, information technology and human resources, and undertake joint development in ecommerce.

Pacific Arena managing director, Mr Chung Kek Yoong, said the decision whether to merge would be made in a year or two, and would depend on the success of the current arrangement. He did not discount the possibility that both agencies might operate under a single brand name if they merged.

One of the aims is to establish a network of affiliates in the region under a regional travel management brand.

He said: “We both do not have a formal affiliation (with a global travel management company) and we hope to start a regional network from here. This deal will provide us with a platform to create one.

“We want to have at least one partner in major Asian markets, including key Chinese cities, Hong Kong, Bangkok and Jakarta...in fact we already have existing working partners in these cities, so the next step would be to establish and formalise the network and branding.”

He expects to go for a different segment of the corporate travel market from the big boys such as American Express and Carlson Wagonlit, and position the company to appeal to large companies that want “strong regional representation”.

ASI managing director, Mr Yap Soon Huat, said one reason why the two decided to work together was because both Mr Chung and himself were owners of their respective agencies and had collaborated successfully on numerous occasions in the past.

Pacific Arena was P&O Travel Singapore until late last year when it was acquired by Investour, a private equity group owned by Mr Chung.

ASI and Pacific Arena currently employs 30 and 50 staff respectively.

Mr Chung added: “We hope to emerge stronger and generate more sales.”