China Eastern Airlines and Japan Airlines signed a joint memorandum of cooperation in Shanghai last week to further develop the Sino-Japanese aviation market. They plan to form a joint venture with aim of starting operation in the first half of 2019. This new strategic partnership will enhance the market competitiveness and generate more passenger traffic on high-density and multi-destinations over the East China Sea.
Currently, China Eastern is the largest carrier on the Sino-Japanese route. The carrier operates 22 Sino-Japanese routes, connecting 26 destinations on both sides with 522 flights a week between the two countries. JAL Chairman Yoshiharu Ueki commented that there are duplicate flights between, in a market where the number of city pairs is limited. After the joint operation begins, the flight schedule will be adjusted to solve the problem of flight duplication and optimize route arrangements. Chinese and Japanese travelers will have a wide range of options and a better travel experience.
The joint venture with JAL allows capacity and network expansion through resource sharing, a more efficient network, and improved service quality. The venture also will work on developing improved freight rates, timetables, ground services and frequent flyer services. The relationship between the two parties hopes to achieve incremental revenue sharing on routes from Shanghai to Tokyo, Osaka, Nagoya and other destinations.
In 2017, the number of Chinese visitors to Japan increased 15 percent year-over-year. China Eastern passengers transported on the China-Japan routes is increasing year by year from 4.07 million in 2015 to 4.78 million in 2017, with an annual compound growth rate of 8 percent.
In recent years, China Eastern has strongly promoted its internationalization strategy, enhancing its global operations and resource allocation capabilities, and having an open attitude in selecting strategic partners with strategic synergies. China Eastern has cooperated with 25 companies in code sharing. Previously, the airline partnered with Air France-KLM and Qantas on joint ventures for Sino-European and China-Australia routes.