China Eastern and Japan Airlines plan first China-Japan aviation joint venture

China Eastern Airlines and Japan Airlines (JAL) on Thursday said they would form a joint venture to capitalise on a Chinese tourism boom, in the first such deal between a Chinese and Japanese carrier.

China Eastern said the pair aimed to offer more connecting flights and lower ticket prices through the venture, which will require the approval of both Chinese and Japanese governments.

During a press conference, airline executives said the venture would allow them to coordinate flight times and share revenue on routes they both fly such as Tokyo-Shanghai, and that they hope operations can begin in the first half of 2019.

"We believe this partnership will generate more passenger traffic between the two countries and open up commercial opportunities," said JAL chairman Yoshiharu Ueki.

In the airline industry, a joint venture refers to an agreement to coordinate aspects of business such as scheduling and pricing which requires approval from competition regulators.

The number of Chinese travelling internationally has surged as household income rises. Chinese are the largest group among visitors to Japan, with the number rising 15 per cent to 7.4 million people last year, Japanese data showed. Only around a third as many Japanese visited China in 2016, showed the latest available data.

The two countries have a strained relationship historically, however, and anti-Japanese protests in China in 2012 sparked by a territorial dispute saw a temporary drop in the number of Chinese visiting Japan.

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Japan Airlines pumps millions into supersonic passenger jet

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Corrine Png, chief executive of transport research firm Crucial Perspective, said the China Eastern-JAL deal was likely to be approved based on today's diplomatic relationship, but there was a risk the venture could be delayed or cancelled if relations soured during the application process.

Will Horton, senior analyst at Capa Centre for Aviation, said the venture - a step up from the pair's current codeshare relationship - made commercial sense but would not have as big a financial impact as ventures involving long-haul flights where connections were more common.

"Short-haul JVs have limited impact across the network aside from when the two airlines control a notable amount of capacity on a trunk route (Tokyo-Shanghai). Then they can choke the consumer and then shake the change out," Horton said.

JAL is part of the oneworld airline alliance and China Eastern is a member of the rival SkyTeam group. Cross-alliance deals have become increasingly common as airlines look to financially beneficial bilateral tie-ups.

UAE currency: the story behind the money in your pockets

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If you go

Flight connections to Ulaanbaatar are available through a variety of hubs, including Seoul and Beijing, with airlines including Mongolian Airlines and Korean Air. While some nationalities, such as Americans, don’t need a tourist visa for Mongolia, others, including UAE citizens, can obtain a visa on arrival, while others including UK citizens, need to obtain a visa in advance. Contact the Mongolian Embassy in the UAE for more information.

Nomadic Road offers expedition-style trips to Mongolia in January and August, and other destinations during most other months. Its nine-day August 2020 Mongolia trip will cost from $5,250 per person based on two sharing, including airport transfers, two nights’ hotel accommodation in Ulaanbaatar, vehicle rental, fuel, third party vehicle liability insurance, the services of a guide and support team, accommodation, food and entrance fees; nomadicroad.com

A fully guided three-day, two-night itinerary at Three Camel Lodge costs from $2,420 per person based on two sharing, including airport transfers, accommodation, meals and excursions including the Yol Valley and Flaming Cliffs. A return internal flight from Ulaanbaatar to Dalanzadgad costs $300 per person and the flight takes 90 minutes each way; threecamellodge.com

UAE currency: the story behind the money in your pockets

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Anghami
Started: December 2011
Co-founders: Elie Habib, Eddy Maroun
Based: Beirut and Dubai
Sector: Entertainment
Size: 85 employees
Stage: Series C
Investors: MEVP, du, Mobily, MBC, Samena Capital

Know before you go

Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
If you’re driving, make sure your insurance covers Oman.
By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.

NO OTHER LAND

Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal

Stars: Basel Adra, Yuval Abraham

Rating: 3.5/5

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