China Southern Airlines has announced that it will leave the airline alliance SkyTeam on Jan. 1, 2019. The airline, one of the ‘big three’ Chinese carriers alongside China Eastern and Air China, has made the decision not to renew its contract. The Guangzhou-based airline joined SkyTeam in 2007 and is the largest airline in China by passenger numbers with a fleet of more than 500 aircraft.
News agency Reuters was informed by an anonymous source within the company that the decision was due to China Southern believing the cost of membership far outweighs any benefits the airline receives as a member of SkyTeam.
In a statement released by SkyTeam, the alliance’s Chief Executive Officer Kristin Colvile said, “Network has always been the foundation of SkyTeam. Our new value proposition retains that strong integrated network and combines it with our continued focus on improving customer experience through technology. China Southern has been a valued member of SkyTeam. We respect its decision and wish it well.”
“China Southern’s decision reflects its strategic development, the changing trends of the global aviation industry and the evolution of alliances,” the alliance said in its statement.
The process of China Southern exiting SkyTeam will take up the entirety of 2019, during which the airline and the alliance will work closely to achieve a ‘seamless’ transition. XiamenAir, a subsidiary of China Southern, will remain as a member of SkyTeam.
Over the last few years, there has been a deepening connection between the American and Chinese carriers, with the ‘big three’ on either side buddying up with their counterparts across the Pacific. SkyTeam member China Eastern Airlines had a 3.55 percent share bought out by fellow member Delta Air Lines for $450 million in 2015. Last year, American Airlines, a founding member of the rival alliance oneworld, bought a $200 million stake in China Southern and the two entered into a codeshare agreement earlier this year.
Excited about the possibilities that China Southern’s exit from SkyTeam presents, American Airlines spokesperson Matt Miller commented to AirlineGeeks on the situation saying: “China Southern is a terrific partner to American and we commend its innovative leadership team. We are very pleased with the progress we have made so far in our newly formed relationship, including the launch of a reciprocal codeshare agreement earlier this year. This news represents a great opportunity for us to continue to expand our relationship with the largest airline in China. With the opening of Beijing Daxing International Airport in 2019 and the ability to cooperate fully with China Southern, we are excited about our future in the Chinese market.”
According to the source that spoke to Reuters, there is a possibility of China Southern joining oneworld, a move that wouldn’t go against the above trend with the alliance keen on recruiting a mainland Chinese airline. However, the airline has made no decision on any future alliances and is unlikely to do so in the near future, with its focus now on the exit from SkyTeam.
China Southern’s headquarters and hub at Guangzhou is of a concern to Hong Kong’s Cathay Pacific, with only 73 miles separating the two cities that compete for air traffic. Cathay Pacific, a founding member of oneworld, does have the ability to veto an airline’s request to join the alliance.
This article was updated to include a statement from American Airlines
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