Cathay Pacific, Malaysia Airlines drop JV proposal

Hong Kong's Competition Commission has closed an investigation into a proposed joint venture agreement between Cathay Pacific and Malaysia Airlines after the two airlines abandoned the idea. In a September 7 statement, the regulator said the two airlines had wanted to enter into a metal-neutral joint business agreement for all their scheduled passenger services between Hong Kong and Malaysia. Distinguishable from a simple codeshare agreement, the joint venture, first flagged in May 2022, would have seen the two airlines sharing revenue and costs on a given route regardless of which carrier operated the actual flight. However, in late July 2023, Malaysia Airlines and Cathay Pacific told the Competition Commission that they would not proceed with the joint venture plan. Both airlines compete on the Kuala Lumpur - Hong Kong route (along with AirAsia and Batik Air Malaysia), while Cathay Pacific also flies the Penang - Hong Kong route. The dominant airline on the country pair is AirAsia, providing 43.06% of the weekly seat capacity. AirAsia is followed by Cathay Pacific (37.2%) and Malaysia Airlines (11.92%). If the joint venture had gone ahead, the two cooperating airlines would have a 49%+ market share (in terms of seat capacity). Fourteen indirect services between Hong Kong and Malaysian destinations with transfer at Kuala Lumpur were also included in the proposed joint venture.<br/>