This article first appeared in The Edge Financial Daily on December 20, 2019 - December 26, 2019

KUALA LUMPUR: Malaysia Airlines Bhd and its Japanese counterpart Japan Airlines Co Ltd (JAL) have received approval from Malaysian and Japanese authorities to cooperate in a wider scope, such as exchanging best practices, exploring collaboration in other operational areas like cargo and jointly developing tourism in the two markets.

Since 2012, the two airlines have begun offering codeshare flight operations between Japan and Malaysia under the oneworld alliance.

In a joint statement yesterday, Malaysia Airlines and JAL said the Malaysian Aviation Commission has granted an individual exemption, while Japan’s Ministry of Land, Infrastructure, Transport and Tourism has granted an antitrust immunity for the joint venture (JV).

“The agreement for joint business will allow the two carriers to cooperate commercially on flights between Malaysia and Japan and aims to deliver customers with more benefits by providing additional flight choices, a larger network, better connections and an enhanced frequent flyer programe,” they said.

JAL president Yuji Akasaka said the two airlines anticipate launching the joint business relationship in 2020 to coincide with the Tokyo Olympics.

In May, Malaysia Airlines signed a memorandum of understanding with JAL to pursue the joint business agreement.

At the time, Malaysia Airlines group chief executive officer Captain Izham Ismail said the partnership would provide better efficiencies and a more comprehensive network for Malaysia Airlines customers, while also playing a key role in further strengthening trade ties between Malaysia and Japan, increasing tourism and promoting the Kuala Lumpur International Airport as an air hub.

“JAL has always had strong commercial links with the national carrier and we are delighted to have taken this next important step with our close oneworld partner,” he added.

Izham also said the start of the joint business between Malaysia Airlines and JAL was an important milestone of the former’s long-term business plan (LTBP), which looks to explore more strategic opportunities as well as deepen more partnerships.

The plan would see Malaysia Airlines achieve its financial break-even by 2022 and generate enough income to cover the cost of capital for its operations two years later. The LTBP focuses on four pillars, comprising right-sizing the airline’s fleet of Airbus and Boeing aircraft and network expansion that is focused on Asia-Pacific; providing a premium customer experience; having a partnership strategy; and diversifying the airline’s revenue.

Currently, Malaysia Airlines operates a 12-time weekly service and JAL operates a seven-time weekly service, representing a total of 19-time weekly flights, between Kuala Lumpur and Tokyo. Malaysia Airlines also operates a daily service from Kuala Lumpur to Osaka and a twice weekly service from Kota Kinabalu to Tokyo.

It was previously reported that the Japanese flag carrier might acquire a stake in Malaysia Airlines to help the latter return to the black. However, in October, JAL denied it was planning to do so.

In July, Khazanah Nasional Bhd, the sole shareholder of Malaysia Airlines, hired US investment bank Morgan Stanley to look at strategic options to help save the loss-making carrier. The sovereign fund is looking to conclude a deal by the end of the year.