Japan Airlines prefers Malaysia Airlines joint venture to equity

November 1st 2019

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As the Malaysian government moves closer to identifying the chosen investor in Malaysia Airlines (MAS), from a reported list of four candidates, Japan Airlines (JAL) told Orient Aviation it was not interested in part ownership of the flag carrier. Read More » MAS and JAL are oneworld alliance members.

“Japan Airlines and Malaysia Airlines have filed an application through the relevant authorities to form a joint venture on flights between Malaysia and Japan,” an airline spokesperson said.

“If approved, the carriers believe the partnership can increase passenger traffic and reciprocally strengthen their international networks.

“These are our main strategies going forward.”

Separately, Singapore Airlines (SIA) CEO,Goh Choon Phong, recently told regional media that in the absence of acquisitions he believed SIA’s new partnership with MAS would make SIA more profitable. SIA is a member of oneworld rival alliance, Star.

“We observed the consolidation taking place elsewhere. I am not holding my breath in our part of the world owing to various considerations. Many of the airlines involved are national carriers,” he said.

“Until the regulatory environment in this part of the world allows more liberal consolidation, this will be a good solution.”

The SIA-MAS partnership involves revenue sharing on flights between Singapore and Malaysia, co-ordinated schedules, code-share ticket sales and reciprocal frequent flyer benefits. It is subject to regulatory approval.

SIA reported a first half profit of US$151.3 million, to September 30, marked by a strong second quarter.

JAL’s first half profit, also to September 30, fell 30% to US$470 million. The airline said investment in adding international flights from Tokyo Haneda, trade tensions and rising costs were among the factors weighing on the results.