NewChina Southern takes American Airlines on board as minority shareholder
China Southern, the sole Chinese carrier to take delivery of the A380, is the last among the country’s three biggest airlines, to take on a foreign partner
China Southern Airlines, the largest passenger carrier in Asia, said it has taken the biggest US airline on board as a minority shareholder, forging an alliance to help transform its operations to compete domestically and overseas.
The two carriers “may seek to increase cooperation in code sharing, transport sharing agreement, staff and experience sharing, sales, passenger loyalty programme, and airport facilities sharing,” China Southern said in its statement.
China Southern’s Hong Kong shares closed 2.7 per cent lower at HK$5.34 after jumping as much as 2.9 per cent following the announcement release on Tuesday morning.
“The deal will benefit two carriers mainly in terms of cost reduction and passenger numbers,” said Delta Asia Securities’ chief operating officer Victor Au. “The cooperation with American Airlines signals the initial step of a reform in China’s airline industry,” where ownership will become a mix of the state with private enterprises, he said.
China Southern is the last of the country’s three dominant carriers to sign a foreign partner. Cathay Pacific Airways, based in Hong Kong, owns about 18 per cent of flag carrier Air China, while China Eastern Airlines sold a minority stake to Delta Air Lines in 2015.