The executive director of Malaysia Aviation Group and chief executive of Malaysia Airlines (MH, Kuala Lumpur International) has said he is actively working to expand joint venture partners and reboot abandoned JV talks with Cathay Pacific (CX, Hong Kong International).
Speaking on the Aviation Week Network podcast earlier this month, Izham Ismail said joint ventures would be an important part of the airline's future operating strategy. As Malaysia Airlines winds up its fifth and most comprehensive restructuring programme, he said that a well thought-out JV could offer the partners strong business opportunities.
"The only joint venture we have now is with JAL - Japan Airlines (JL, Tokyo Haneda)," he said. "Our ambition is to grow our joint business with many other airlines."
Izham was not asked about the 13-member Oneworld alliance that Malaysia Airlines is a member of, whose carriers cooperate to facilitate the smooth transfer of passengers, codeshares, and connecting flights - all features of most commercial passenger airline joint venture agreements.
Malaysia Airlines did not respond to a request for comment.
"Recently, we had ambitions to get a joint venture with Cathay Pacific, but the deal was not palatable to regulators so we pulled the plug," the chief executive said.
As previously reported by ch-aviation last year, the two carriers discontinued talks after the Malaysian authorities raised concerns about the competitive impact of the JV. The proposed agreement would have involved network planning and schedule coordination, pricing coordination, inventory management coordination, distribution systems coordination, joint sales and marketing, service and product cooperation, and a frequent flyer agreement. In the podcast, Izham described the Malaysian Aviation Commission's concerns as "technicalities."
He also said he was keen to renew talks with Cathay Pacific and that JV with other carriers were underway. "I cannot say with whom, but we are having deep conversations with three other carriers about joint ventures, and I hope we will pursue others more aggressively in the future," he said. "This does not prevent us from revisiting Cathay Pacific in the next 12-24 months. Joint ventures are a very important pillar to our business plan moving forward."
According to ch-aviation capacities data, Cathay Pacific is the dominant carrier on the Hong Kong-Malaysia country pair, providing 38.63% of the available weekly seats, followed by AirAsia (AK, Kuala Lumpur International) (36.13%), Malaysia Airlines (10.73%), AirAsia X (D7, Kuala Lumpur International) (7.9%), and Batik Air Malaysia (OD, Kuala Lumpur International) (6.6%). The most heavily trafficked route on the country pair is Hong Kong-Kuala Lumpur (78.72% of weekly available seats), followed by Hong Kong-Kota Kinabalu (13.27%) and Hong Kong-Penang (8.01%).