Malaysia Airlines and Japan Airlines (JAL) are ready to launch a joint business structure in 2020 following a decision from the Malaysian Aviation Commission (MAVCOM) to grant an individual exemption and Japan’s Ministry of Land, Infrastructure, Transport and Tourism to grant an antitrust immunity.
The joint business partnership inked in May was an expansion of the code-sharing deal between the two carriers that started working together in 2012 when Malaysia Airlines joined the oneworld alliance.
Both airlines said in a joint statement the agreement would allow them to co-operate commercially on flights between Malaysia and Japan and deliver customers more benefits by providing additional flight choices, a larger network, better connections and an enhanced frequent flyer programme.
Captain Izham Ismail, Malaysia Airlines chief executive officer, expressed confidence that with this partnership “we will be able to deliver important benefits to our customers and to grow the business between our countries.”
Japan Airlines president Yuji Akasaka said the company expects to launch this joint business relationship in 2020, when Japan hosts the 2020 Summer Olympic (Tokyo 2020), to provide additional travel benefits for both airlines’ mutual customers.
Currently, Malaysia Airlines operates a 12 times weekly service and JAL a seven times weekly service, representing a total 19 times weekly flights.
Malaysia Airlines also has a daily service from Kuala Lumpur to Osaka, and a twice weekly service from Kota Kinabalu (Sabah) to Tokyo.
While this partnership enables the Malaysian national airline to expand its reach in Japan, which is expecting an influx of visitors in 2020, it has yet to find a suitable suitor to help ease its financial woes.
In March, Malaysia’s Prime Minister Tun Dr Mahathir Mohamad said the government was considering whether to shut, sell or refinance the loss-making carrier.
Then in July Khazanah Nasional, Malaysia’s sovereign wealth fund and owner of Malaysia Airlines, hired American multi-national investment bank Morgan Stanley to explore strategic options for the carrier in a bid to turn it around, including a potential stake sale. The government had hoped to confirm an investor to take a stake by end of this year.
Speculations were rife after this announcement as to the identity of insterested parties. It was widely reported that Khazanah had shortlisted four potential candidates, with JAL named as one after the inking of the joint business agreement with Malaysia Airlines.
Both JAL and Qatar Airways, the other carrier named as a potential partner, had since denied they were going to take a stake in the national carrier.
However, last week Malaysia’s Economic Affairs Minister Datuk Seri Azmin Ali said the government would need more time to find a strategic partner for Malaysia Airlines and thus would not make a final decision this year.
This is because the proposals received by Khazanah were not “attractive” enough and the decision may only be made next year, he explained.
Azmin said the matter was discussed during the board meeting of Khazanah on 17 December, and the chairman Tun Dr Mahathir Mohamad (also Malaysia’s Prime Minister) and the board agreed to look at other options before making a final decision.
According to reports more than 20 potential investors, both regional and international (airlines and non-airlines), expressed interest in being Malaysia Airlines’ partner.
