China's Biggest Airline to Leave SkyTeam Alliance Next Year
Liao Shumin
DATE:  Nov 16 2018
/ SOURCE:  Yicai
China's Biggest Airline to Leave SkyTeam Alliance Next Year China's Biggest Airline to Leave SkyTeam Alliance Next Year

(Yicai Global) Nov. 16 -- China Southern Airlines, the country's largest carrier, has opted not to renew its contract with SkyTeam, one of the world's three aviation sector alliances, and will instead focus on cooperating with leading international players like American Airlines.

The Guangzhou-based carrier announced its exit through its Weibo account, 11 years after originally joining SkyTeam.

The airline, China's largest by passenger numbers, aims to promote bilateral and multilateral cooperation going forward and establish a new type of cooperative partnership, it said.

China Southern's lack of decision-making within SkyTeam despite being the second-biggest member was a key factor, according to aviation industry analyst Lin Zhijie, adding that the carrier's North American routes have not received support from alliance partners. The exit may have some impact on the joint operation of European routes but it frees up China Southern to find partners among the members of the big three alliances, he added.

The big three alliances are Oneworld, SkyTeam and Star Alliance. American Airlines is the founding member of Oneworld and also the world's largest airline. The close relationship between the two companies has sparked speculation that the Chinese airline could join Oneworld in the future.

SkyTeam respects China Southern's decision, which reflects the changing trends of the global aviation industry, it said in a statement.

The state-own company signed a deal with American Airlines in March last year with the US carrier set to subscribe to China Southern Airlines H-shares to the tune of USD200 million, representing 8.8 percent of the firm's shares listed on the Hong Kong bourse and 2.7 percent of general capital. China Southern's board of directors will also appoint a representative from American airlines to act as an observer.

The two parties also committed to strengthening cooperation at the time, by sharing codes with each other and extending their respective route networks to more cities in China and the US.

The pair will also join hands in areas such as combined transport agreements, personnel exchange, sales, passenger loyalty programs and sharing of airport facilities, as part of efforts to gradually establish a long-term and comprehensive strategic partnership.

The trend of exiting alliances is growing globally with more and more cross-alliance equity and market cooperation taking places, such as the global takeover of Etihad Airways and American Airline's investment in China Southern.

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Keywords:   CHINA SOUTHERN AIRLINES,SkyTeam,AMERICAN AIRLINES