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Joint Business agreement for Japan Airlines and China Eastern as Japanese flag carrier confirms its long haul LCC plans
August 10th 2018
Japan Airlines (JAL), a oneworld member, and SkyTeam’s China Eastern Airlines have signed a Memorandum of Understanding, an agreement that aims “to improve customer convenience and enhance the quality of services provided by both carriers”. Read More » The airlines have been code sharing on China-Japan routes since 2002.
The enhanced cooperation would provide reciprocal access to more than 50 JAL-operated domestic services and and a minimum of 80 China Eastern domestic destinations. The carriers expected the agreement to take effect in the 2019 financial year, subject to regulatory approvals. China Eastern added the airlines intend to cooperate more closely on frequent flyer programs, ground services and sales.
“We are delighted to announce that China Eastern and JAL plan to broaden our partnership in each market. We look to bring more benefits, more choices and more value to our customers. We believe this partnership will generate more passenger traffic between the two countries and open up commercial opportunities,” said JAL chairman, Yoshiharu Ueki.
“The joint business between China Eastern Airlines and Japan Airlines is a new cooperation on the basis of the broad market prospect of Sino-Japanese routes and the cooperation trend in the global civil aviation industry. This is the common strategic choice for both of us facing the future and customers,” said China Eastern president, Ma Xulun.
In last 18 months, JAL has forged multiple agreements outside its oneworld alliance, including cooperation with Aeroflot and Hawaiian Airlines. This week, JAL signed a bilateral interline agreement with Mexican LCC and Sukhoi SuperJet operator, Interjet Airlines. JAL passengers arriving in Vancouver, Los Angeles and Dallas will have their luggage checked through on Interjet connecting itineraries.
China Eastern also is seeking more partnerships. In July, the Shanghai heavyweight announced plans to raise up to US$2.23 billion from a Shanghai Stock Exchange share sale. Private carrier, Juneyao Airlines, and its parent, the Juneyao Group, said they would invest US$1.9 billion for five per cent of China Eastern to boost the Juneyao brand abroad. Last year, China Eastern acquired ten per cent of Air France-KLM and U.S. carrier. Delta Air Lines acquired 3.55% of China Eastern in 2015, a purchase that entitled the Atlanta-headquartered airline to an observer seat on the Mainland carrier’s board.
In more JAL Group news this week, the Japanese flag carrier has formally established a corporate entity that will operate medium and long-haul low-cost B787 flights from 2020. The company’s interim name is TBL Co. Ltd., which stands for “to be launched.”
Shinto Nishida is the representative director on the LHLCC. The carrier’s headquarters will be at Tokyo Narita Airport. JAL owns 100% of the company, although it is seeking other investors.
Initially, the LHLCC will fly two B787-8s to Southeast Asia, Europe and the U.S. to complement the domestic and regional networks of its joint venture, Jetstar Japan. It plans to have a fleet of 10 B787s by 2023. To avoid cannibalization, JAL said “TBL Co. Ltd.” would not operate to destinations served by mainline JAL.
“When JAL establishes the new LCC business, the company aims to create new demand, working with the successful services of Jetstar Japan, which features domestic and short-haul international flights,” the airline group said.
In the interim, JAL’s arch rival, All Nippon Airways, is strengthening its LCC position by merging its two subsidiary LCCs, Peach Aviation and Vanilla Air, into a single entity that will operate under the Peach brand and expand onto long haul routes.
