The Competition Commission said on Thursday that is has closed a probe into a proposed partnership between Cathay Pacific and Malaysia Airlines, being as the companies have dropped the idea.

The two airlines were considering sharing revenue and costs for their Hong Kong-Kuala Lumpur and Hong Kong-Penang routes, as well as for various indirect services via the Malaysian capital.

The plan came to light after they applied for an exemption from Malaysia's competition law. The commission said it had reasonable cause to suspect that such a pact would contravene Hong Kong's competition law and so it launched an investigation.

"Implementing the [proposal] would likely eliminate all competition between the [airlines] as they would effectively operate as a single entity on the routes in question. There also appears to be barriers to market entry and expansion, and the competitive constraints exerted by existing competing airlines on the [airlines] may be insufficient," a statement said.

The commission added that the pact would have included coordination on pricing and schedules, as well as joint sales and marketing.

But the regulator's probe has ended, being as the airlines said in July that they were not proceeding with the plan.

Cathay Pacific, for its part, said in a statement that it ended discussions with Malaysia Airlines before it received “any definitive comments the commission might have had, or the concerns mentioned in the announcement”.

The flag carrier stressed that it has fully complied and cooperated with the Hong Kong and Malaysian authorities throughout the process.
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Last updated: 2023-09-07 HKT 19:50