China Southern Airlines eyes world domination as it puts plans to join Oneworld on the back burner

25-Jun-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

China Southern Airlines wants to become the world’s biggest carrier in the next three years and does not plan to seek an alliance with any of the industry’s major groups before 2021.

Instead, the Guangzhou-based airline has opted for tie-ups with a handful of major carriers after quitting Skyteam, one of the big three clubs that most established airlines opt to join.

Wu Guoxiang, China Southern’s senior vice-president for international and corporate relations, said it would stay independent “maybe for a few years”, speaking on the sidelines of the CAPA Centre for Aviation CEO summit in Seoul last week.

“I think it is important to build bilateral cooperation with every carrier that we want, for us to grow, we are the largest carrier in Asia,” he said. “In three to five years we will be the largest in the world. We need the flexibility to cooperate the way we want.”

For the past 11 years China Southern has benefited from flying passengers on partner airlines in the Skyteam alliance and selling connecting tickets while widening its brand presence.

Seen as a strong candidate for the Oneworld alliance, which counts Cathay Pacific Airways as a founding member, joining the group could benefit frequent fliers in the region, who would have an expanded range of airlines to fly with alongside Hong Kong’s de facto flagship airline.

China Southern has struck a number of partnerships with Oneworld carriers since going it alone, including with British Airways, Finnair, and American Airlines (AA), which paid $200 million (HK$1.56 billion) for a 2.76 per cent stake in March 2017.

Late last year, Qatar Airways bought a 5 per cent stake for an undisclosed sum, placing it at odds with AA, which it is in a separate dispute with.

Oneworld reiterated it was not in talks to add China Southern, which is the mainland’s largest airline, to its elite membership.

The group, comprising several carriers including the namesake flagship parent and Xiamen Airlines, carried more than 140 million passengers last year, and flies with more than 840 passenger and cargo planes.

That fleet number is expected to more than double to 2,000 aircraft by 2035, Wu said. By 2021, China Southern is expected to operate 1,000 planes.

With the prospect of new permanent members further off, talks to keep Qatar Airways inside the grouping seem to be working for now. Qantas and AA are being blamed for the carrier’s threat to leave because they are blocking Qatar from expanding in its rival’s home markets.

Akbar Al Baker, the airline’s CEO, responded tersely on the sidelines at the International Air Transport Association (IATA) meeting in Seoul, which preceded the CAPA event.

“Well we are still there [in Oneworld],” he said.

Asked if he would carry out his threat, he replied: “We wait and see.”

Oneworld has repeatedly tried to paper over the cracks in the alliance, communicating to Al Baker that his airline is a valued member and it would be more of a contributor inside rather than out.

The alliance said it hoped Qatar would decide to stay.

“Oneworld communicated that to Qatar Airways most recently in Seoul,” a spokesman said.

Meanwhile, at the IATA summit, Oneworld said it was at an “advanced stage” of discussions with a number of airlines to join its second-tier membership programme, opening partnerships with smaller, regional carriers to passengers in areas of the world where the alliance’s frequent fliers had less flying options.

Oneworld has 13 full-time members that serve 1,100 airports in 180 territories and serve 550 million passengers on 3,500 aircraft annually.


Category: China

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