China Southern to bail out of SkyTeam
The China Eastern Airlines Airbus A330-223 painted in "SkyTeam" special colors is pictured at the Guangzhou Baiyun International Airport in Guangzhou City, south China's Guangdong Province, on September 30, 2018.
China Southern Airlines has said it will leave the SkyTeam airline alliance at the start of next year to meet the needs of the company’s own development strategy.
SkyTeam is one of the world’s three major airline alliances and had two big Chinese carriers, China Southern and rival China Eastern Airlines Corp Ltd, as members, which is unusual given they operate in the same market.
The three alliances, which also include Star Alliance and oneworld, provide reciprocal benefits for passengers such as lounge use and frequent flyer points and also transfer passengers in a boost to revenue.
China Southern, the country’s largest airline by passenger numbers, is leaving SkyTeam because it believes it is expensive relative to the benefits of membership, a source said.
It will consider joining oneworld but has not yet made a decision and would not do so immediately. Cathay Pacific, as a founding member of the oneworld alliance, however, has the right to veto other entrants from the greater China region.
China Southern’s Guangzhou hub competes against Cathay Pacific for international traffic.
In a statement to the Shanghai stock exchange, China Southern said it did not expect its decision to not renew its SkyTeam membership to significantly impact its operations.
SkyTeam 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 the year-end.
Xiamen Airlines Co Ltd, a subsidiary of China Southern that is also a SkyTeam member, however, has no plans to quit the alliance.
Oneworld member American Airlines Group Inc last year spent US$200 million buying a stake in China Southern.
