MAS and SIA have a difficult relationship especially on the 'Domestic' sectors.
Traditionally Singapore was a 'domestic' point and socially remains so, but as part of the separation of Malaysia-Singapore Airlines in 1972 - MAS was dealt the task of continuing 'domestic' routes whilst SIA was designed to concentrate on International sectors.
For decades, MAS operated frequent services between various points in Malaysia into Singapore to feed into SQ
's International network as part of this agreement which dates back to the late 1960s. However, with cooler ties during the 1990s, together with Malaysia Airlines' large expansion internationally - MAS was under pressure to redirect domestic passengers via Kuala Lumpur and a whole new airport was thus built at Sepang as part of this masterplan. MAS management thus drastically reduced capacity on its Singapore feeder flights - and personally I think quite rightly so.
However, there still remains strong demand for most sectors between Malaysian airports and Singapore and thus this code-share could be a good answer as both nations should continue to work together on these important links for social, business and political reasons.
btw KFly - MAS and SIA were pioneers in the code-sharing world, together with BOAC, Qantas and other Commonwealth airlines, as many flights between London and commonwealth states operated on a 'code-share basis albeit under a different guise in those days.
MAS and SIA commenced joint operations in 1937 as a single airline before splitting in 1972 but continue to operate the KUL
shuttle as a 'joint-service' (as the term of code-sharing had not been born) until this very day.