JAL-China Eastern plan short haul JV: a small step towards cooperation

Japan Airlines and China Eastern plan to implement a short haul Japan-China joint venture in 2019. This will be the first JV between airlines of the two countries and one of a small number of short haul JVs in Asia. The longstanding partners already have extensive international and domestic codesharing. They appear to be pitching their JV with the usual litany of benefits, but 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.

Connections are less important in short haul JVs than in long haul ones, and JAL and China Eastern would potentially have to transfer passengers using their high-yielding Shanghai-Tokyo flights.