China Southern wants to deepen AA ties for US push

China Southern Airlines is plotting to strengthen its ties with American Airlines to help expand its presence on China-US routes, according to the carrier’s president Tan Wangeng.

He said there was the potential to deepen ties with the US airline following AA’s $200m acquisition of a 2.68 percent stake in China Southern earlier this year. The deal, which closed in August, has also raised speculation that China Southern will seek an exit from the SkyTeam alliance and potentially join oneworld.

“The market between China and the US is the biggest one so we need strong support,” said Tan Wangeng in a televised interview with Bloomberg. “That’s the reason why we set the cooperation relationship with AA.

“It’s just the beginning. I think in the future China Southern will fly more flights to the US and AA will fly more to China. I think we have a lot of potential to cooperate.”

China Southern currently flies from its home base of Guangzhou to New York J F Kennedy, Los Angeles International and San Francisco, as well as Wuhan-San Francisco.

According to figures from OAG, it had an 11.6 percent capacity share of the two-way China-US market in 2017, behind United Airlines (20.5 percent), Air China (20.1 percent) and China Eastern Airlines (15.8 percent). AA, meanwhile, has an 8.3 percent share.

Earlier this month, AA commenced a non-stop daily service between Beijing and Los Angeles, complementing its existing service from Chicago and Dallas/Fort Worth. The new service was made possible by a slot-swap with China Southern at Beijing Capital, one of the terms of its $200m investment.

The LA-Beijing route, operated using a Boeing 787-8 Dreamliner aircraft, is AA’s 15th between the US and the Asia-Pacific region.

China Southern’s US focus comes as the carrier prepares for the opening of the $13bn Beijing Daxing International in 2019. Once completed, it will have capacity to handle 45 million passengers per year, with an eventual capacity of 100 million.

China Southern will be allocated 40 percent of the capacity at the new hub and base about 250 aircraft there.

The airline currently operates 700 passenger and cargo transport aircrafts, including Boeing 787, 777, 747, 757 and 737 as well as Airbus A380, A330, A321, A320 and A319.

In October, it finalised an order for 38 Boeing aircraft in a deal worth $5.65bn at list prices.