JAL - Japan Airlines (JL, Tokyo Haneda) and China Eastern Airlines (MU, Shanghai Hongqiao) have announced they will form a joint venture, expanding upon their existing codeshare agreement dating back to 2002, Nikkei Asian Review has reported.
The carriers intend to coordinate their schedules, sales, and other operations pending the antitrust approvals in both countries. Once approved, the joint venture would cover flights between China and Japan, as well as domestic flights operated by each of the airlines.
Under their proposed joint business agreement, which they hope to implement during FY2019, JAL and China Eastern hope to expand their cooperation to include JAL's domestic network featuring over 50 cities in Japan and over 80 domestic Chinese routes operated by China Eastern.
The joint venture is set to become the first such an agreement between a Chinese and a Japanese airline.
JAL is a member of Oneworld while China Eastern belongs to Skyteam. Despite this, the carriers have already cooperated closely under their existing codeshare partnership covering China-Japan and domestic routes. They also mutually recognise their respective frequent flyer programmes.
According to the ch-aviation capacity module, the two carriers have a combined market share of 30.4% by capacity between mainland China and Japan. China Eastern is the market leader with a 21.6% market share itself. The airlines have a 14.5% and a 28.9% market share in domestic markets in China and Japan, respectively.
China Eastern Airlines flies 242x weekly to Japan, serving a total of 15 cities in the country, with the most frequent flights to Osaka Kansai, Nagoya Chubu, Fukuoka, Tokyo Narita, and Tokyo Haneda. For its part, JAL operates 98 weekly services to mainland China, serving Shanghai Pudong, Beijing Capital, Tianjin, Guangzhou, Shanghai Hongqiao, and Dalian. The Japanese carrier also operates 14x weekly to Hong Kong International.
Separately, China Eastern Airlines has announced plans to raise up to USD2.23 billion through a share sale at the Shanghai Stock Exchange. Privately-owned Juneyao Airlines (Shanghai Hongqiao) said it will invest USD1.9 billion through this programme, taking a 5% stake in China Eastern Airlines.
