China Southern Airlines

China Southern Airlines eyes Brazil and Argentina destinations to expand its global reach

Asia’s largest carrier by passengers flown also plans to start a Johannesburg service in the wake of its 2015 inauguration of Nairobi flights

PUBLISHED : Saturday, 10 June, 2017, 12:57am
UPDATED : Saturday, 10 June, 2017, 1:08am

China Southern Airlines will soon be landing on all of the world’s human-inhabited continents.

Asia’s largest carrier in terms of passengers flown plans to establish passenger routes to Brazil and Argentina within the next five years, completing its worldwide reach, senior vice president of marketing Wu Guoxiang said in an interview.

Meanwhile, the airline also plans to start passenger service to Johannesburg, South Africa, after inaugurating service to Nairobi, Kenya in 2015, to build out its reach in Africa. The airline expects to have passenger service to three to five destinations each in South America and Africa within the next five years, Wu said.

China Southern is making the “transfer market” a key component of its network expansion, referring to the strategy that helped make Emirates Airline one of the world’s most formidable competitors among global airlines.

Leveraging its large domestic market – at the centre of a rapidly urbanising megalopolis with a population of more than 100 million people – gives China Southern an edge over other airlines pursuing growth by developing a transfer market, Wu said. Higher passenger volume relative to other carriers in the region gives China Southern the ability to entice customers looking for the cheapest way to cross hemispheres.

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“Because we have a huge amount of domestic passengers, so we have the power and opportunity to launch new routes,” Wu said. “We’ve spent about 10 years building our international network, so for many new destinations we’re a newcomer, so we must let the market know us. The simple way is to provide a lower price.”

Wu declined to comment on reports that China Southern is in talks to sell a stake in itself worth US$200 million to American Airlines, saying only that the two airlines are talking about “how to cooperate in the future”.

Negotiations are focused on “code-sharing, network coordination, ground-handling, maintenance and training”.

As for making a formal switch from the Sky Team airline alliance to the Oneworld alliance, which includes American, Wu said: “Up to now, we have no decision about whether to switch alliances.”

Wu spoke with the South China Morning Post in Chicago, one stop on a “world tour” touting the airline’s home base of Guangzhou.

As part of the tour, the city’s vice mayor, Cai Chaolin, met with his counterpart, Chicago deputy mayor Steve Koch, and the heads of some of Chicago’s multinational companies, including Boeing Co and Walgreens Boots Alliance. Their aim was to attract potential participants to the 2017 Fortune Global Forum, set to convene in Guangzhou in December.

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Reflecting China Southern’s global expansion, Cai and Guangzhou officials will continue city-hopping over the next few months, with plans to visit London and Munich.

In a nod to the midwestern US city, Wu said China Southern aims to start passenger service to Chicago next year. He declined to specify a time frame because the company is still engaged in negotiations with US aviation authorities to gain approval for the plan.