China Southern Airlines announced their exit out of SkyTeam in 2018. They were feeling left-out due to SkyTeam founding member Delta’s cooperation with China Eastern while cold-shouldering them. They have been rumoured to join oneworld since then. But that doesn’t seem to have materialised for now. American Airlines bought a 2.76% minority stake in China Southern Airlines in 2017, and there is a deeper partnership in play between both these airlines going forward.

Now almost totally taking everyone by surprise, Qatar Airways announced today that they have picked up a 5% stake in China Southern Airlines. According to H.E. Akbar Al Baker,

China Southern Airlines is one of the most prestigious airlines in the Chinese domestic market and an important market player in the world, with massive potential for cooperation in the future.  Given the complementary strengths and resources of each of China Southern Airlines and Qatar Airways, there are opportunities for us to work together and build a long term relationship in ways that would bring benefits to customers of both airlines. The investment is a clear demonstration of Qatar Airways’ continued commitment to connecting travellers across all corners of the world in a way that is meaningful and convenient.  Qatar Airways very much looks forward to the opportunity to deepen our working relationship with this great airline and further enhance the travel opportunities across the globe.

The press release indicates that the stake buy was through an on-market offer. Looks like China Southern airlines was totally caught off-guard.

Qatar Airways Group Q.C.S.C. (“Qatar Airways”) is pleased to announce that as part of its strategy to invest in the strongest airlines around the world and continue enhancing operations and network connectivity, on 28 December 2018, it has completed an on-market purchase of certain A shares and H shares of China Southern Airlines Company Limited (“China Southern Airlines”), resulting in our aggregate holding of approximately 5.00% of the total issued share capital of China Southern Airlines.

Qatar Airways is investing in airlines around the world for a few years now. Qatar Airways already has a stake in Air Italy (49%),  IAG (20%), LATAM (10%) and Cathay Pacific (9.99%). They even wanted to pick up a stake in American Airlines but that news didn’t go down well. Let’s see how does American Airlines react to this investment.

China Southern Airlines doesn’t fly to Doha currently. Qatar Airways flies to Beijing, Guangzhou, Shanghai, Chongqing, Hangzhou, Shanghai, Hong Kong and Chengdu. China Southern Airlines has hubs at Beijing and Guangzhou airports along with secondary hubs at Shanghai and Chongqing airports so Qatar Airways will benefit from improved connectivity.

What do you think of Qatar Airways stake buy in China Southern Airlines?