Japan Airlines and China Eastern are joining hands to form a short haul Japan-China joint venture in 2019. This will be the first JV between a Chinese and Japanese carrier one of a small number of short haul JVs in Asia.
The longstanding partners already have extensive international and domestic codesharing, the venture will allow them to coordinate flight times, offer more connecting flights, set lower ticket prices and share revenue on routes they both fly such as Tokyo to Shanghai.
“This partnership will generate more passenger traffic between the two countries and open up commercial opportunities,” a report quoted JAL Chairman Yoshiharu Ueki.
Although the carriers are pitching their JV with the usual litany of benefits, however, for now the agreement presents a small step change.
JAL has a strong corporate Japan travel profile that is sticky to Japanese service and does not want to travel on another airline. A JV would need to share financials and coordinate growth, yet China Eastern typically has to meet government growth targets. JAL has high costs and high yields, whereas China Eastern has comparatively low costs and low yields, said a CAPA report.