China Southern Airlines has decided not to renew its contract with SkyTeam, the global Airline Alliance, as of January 1, 2019. This news was announced today via a press release from SkyTeam, ironically enough, on the eleventh anniversary of the airline having joined SkyTeam. Below is what the airline had to say about China Southern SkyTeam Exit, via their own announcement.
China Southern joins Skyteam on November 15, 2007. Pic Courtesy: SINA
As per a stock exchange announcement filed with the Hong Kong Stock Exchange:
The board of directors (the “Board”) of the Company wishes to inform its shareholders and potential investors that, based on the needs of the Company’s development strategy and to better align with the new trend of cooperation model in the global aviation industry, the Company decided not to renew its SkyTeam Membership Agreement from 1 January 2019 and will complete the transition arrangements in 2019. During the transition period, the Company will work closely with SkyTeam on a cooperative process to ensure a sound transition for customers and partners. The Company will explore the possibilities to establish new partnerships with advanced airlines around the world, promote bilateral and multilateral cooperation and provide quality services to passengers around the world.
China Southern has a lot going for them. For one, they are Asia’s largest airline, carrying over 100 million passengers a year. However, they have been feeling cold within SkyTeam for a while. Delta invested in China Eastern in 2015, followed by a 2017 investment from China Eastern & Delta in Air France/KLM. So, China Southern felt left out of this wide-ranging global alliance which is actually a subset inside SkyTeam.So this discussion about leaving SkyTeam was actually stoked about a year ago at the same time.
China Southern plans to instead partner better with other airlines such as American Airlines. American Airlines indeed has a minority investment in China Southern. One place where the airline could logically go is oneworld. No mainland China carrier is a member of the oneworld alliance yet. Air China is a member of Star Alliance already. However, Cathay Pacific, right in the neighbourhood in Hong Kong is already an old and strong member of oneworld, which could rebuke such a move.
What do you think happened here between SkyTeam and China Southern that made them pull the trigger? Does this affect your plans on flying to China?
Looks like Cathay has the right to veto, so it could be tricky on whether they accept China Southern.
Lets see if AA can muscle their way in and get China Southern into OW.
Folks often say Cathay won’t allow it given HK and GZ are so close as cities. But for me, if Thai & SIA can cooperate, then surely the market is big enough for them to co-exist.
The twist is Air China has a 30% stake in CX. Would CX leave OW then to join *A?
Oneworld soon?