China Southern Airlines to exit SkyTeam alliance

SHANGHAI • China Southern Airlines plans to leave the SkyTeam alliance, the carrier said on Thursday, opening the potential for it to become a member of the oneworld group alongside strategic partner American Airlines Group.

SkyTeam and oneworld are two of three global airline alliances that provide reciprocal benefits for passengers such as lounge usage and frequent flier points and give airlines transfer passengers from partners in a boost to revenue. Star Alliance is the third.

American Airlines spent US$200 million (S$275 million) on a minority stake in China Southern last year with an eye to growing in the booming Chinese travel market, but the benefits of the partnership have been stalled in part by the Chinese carrier's presence in SkyTeam.

China Southern said it will leave SkyTeam on Jan 1 to develop its own strategy. It said it would strengthen its partnership with American Airlines, but did not specify any plans to join oneworld.

"This news presents a great opportunity for us to continue to expand our relationship with the largest airline in China,"American Airlines said in a statement. The two carriers launched a reciprocal codeshare agreement this year.

One source, who spoke on condition of anonymity, told Reuters that China Southern would consider joining oneworld in the future.

"Our members will assess in due course the potential implications for oneworld of China Southern's announcement that it is to leave SkyTeam," oneworld said in a statement. Members of oneworld include British Airways, Cathay Pacific, Qantas and Japan Airlines.

SkyTeam - which includes Delta Air Lines and Air France-KLM - has said it will work with China Southern to ensure a seamless transition for all customers and partners - a process that will run throughout 2019 and be completed by year end.

SkyTeam already has another big Chinese carrier, China Eastern Airlines, as a member. It is unusual to have two rival carriers within the same alliance. Xiamen Airlines, a subsidiary of China Southern that is also a SkyTeam member, has no plans to quit the alliance, its spokesman Qiu Dapeng said on Thursday.

US airlines have so far struggled to gain a foothold in China, scaling back routes amid tough competition from state-backed Chinese rivals that are aggressively expanding their fleets and offering cut-price tickets.

Beijing plans to open its second international airport, Beijing Daxing International, next year.

REUTERS

A version of this article appeared in the print edition of The Straits Times on November 17, 2018, with the headline 'China Southern Airlines to exit SkyTeam alliance'. Subscribe