Mavcom: MAS, Japan Airlines tie-up in the works

The proposed tie-up between Malaysia Airlines (MAS) and Japan Airlines Co Ltd (JAL) is undergoing public consultation, the Malaysian Aviation Commission (Mavcom) said.

Online portal The Malaysian Insight reported that a consultation paper with details on the first of its kind of such an arrangement for a local airline would be available on Mavcom's website until May 27.

A Mavcom spokesperson said the time frame for a decision on the application differs for each case.

"The time frame for assessing an individual exemption varies on a case-by-case basis, depending on factors, such as the complexity of the case and cooperation from the applicants," the spokesperson was quoted as saying.

Accordingly to the report, MAS recently confirmed that it had submitted an application to Mavcom, seeking an exemption under Section 51 of the Mavcom Act 2015 to pursue the arrangement with JAL.

The exemption relates to Section 49 of the Mavcom Act, which prohibits an agreement between enterprises with a possible effect on competition or has an objective to prevent, restrict or distort competition in any aviation service market.

"Malaysia Airlines confirms that it has submitted to Mavcom an application for an individual exemption under Section 51 of the Act for a joint business with Japan Airlines for flights between Malaysia and Japan.

"The joint business is subject to regulatory approvals and Malaysia Airlines will share more details once approvals are granted,” the airline reportedly told the news portal.

The report noted that both JAL and MAS had experience dealing with financial issues and that MAS had overcome its bankrupt status filed in 2010 to become the world’s most profitable airline.  

However, MAS continues to record losses even after it was subjected to a 12-point turnaround plan by Khazanah Nasional Bhd.

Prime Minister Dr Mahathir Mohamad had said the government is reviewing various options on future of the loss-making national carrier.