Impact of the JVA on fares. 69. In relation to the impact of the JVA on fares offered in the Kuala Lumpur – Denver market, the Commission found an increase of [✄] in the Parties’ average one-way economy class fares (2019 vs 2017). However, the Commission also found that the Parties’ fares were still consistently lower than their competitors. For example, the Parties’ average one-way economy class fare in 2019 was [✄] while their competitors’ was [✄]. Although there had been an increase in fares post-JVA, the Commission finds that price increases may be due to various factors which include, but are not limited to, inflation, demand, and variable costs. Furthermore, the fare increase is mitigated by the Parties having consistently lower fares than their competitors. Appendix V shows the chart illustrating the trend in the Parties and their competitors’ average one-way economy class fares for the Significant Relevant Markets assessed in Stage 3.
Impact of the JVA on fares. 75. In relation to the impact of the JVA on fares in the Kuala Lumpur – Honolulu market, the Commission found that the Parties’ fares have shown to be lower when they were in a dominant position. The Commission found that the average fare offered by the Parties in 2018 when they were dominant was [✄] (Others: [✄]). Although the Parties’ average fare in 2019 was slightly higher than their competitors’ (Parties: [✄], Others: [✄]), the Parties had a much lower market share than D7, which had a [✄] market share. As such, the Commission found that the JVA does not pose any detrimental effect neither in terms of fares for the Kuala Lumpur – Honolulu market nor on entry into the market by future competitors. Kuala Lumpur – Mexico City
Impact of the JVA on fares. 84. In relation to fares, the Commission found that the Parties’ average economy fares were higher than their competitors in 2019 [✄], the year in which their market share was the highest at [✄]. Since then, the Parties have lost a significant amount of market share and their average fares in 2021 were lower than their competitors’ [✄]. There is therefore little concern in terms of fares in this market. Kuala Lumpur – Seattle
Impact of the JVA on fares. 90. The Commission found that the Parties’ average fare throughout 2019 has consistently been lower than their competitors' (Parties: [✄], Others: [✄]). The Parties’ average fares in 2021 were also lower than their competitors’ (Parties: [✄], Others: [✄]). In the absence of market power in the Kuala Lumpur – Seattle market, the Parties’ fares are expected to remain low for them to remain competitive in the market. As such, the JVA is unlikely to pose any detrimental effect in terms of fares for the Kuala Lumpur – Seattle market. (The remainder of this page has been intentionally left blank.) Conclusion on subparagraph 50(c) of Act 771 91. The Commission, therefore, finds that there are no significant detrimental effects on competition or on consumers. While there has been some lessening of competition, such as in the Kuala Lumpur – Denver market, the Commission finds that any negative effect is mitigated and has also not been passed on to consumers. Therefore, on balance, the Commission finds that the benefits of the JVA outweigh the detrimental effects of the JVA on competition.
