China Southern In Discussions To Join Oneworld

China Southern In Discussions To Join Oneworld

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While this was rumored as far back as 2018, it seems that discussions are once again taking place over the prospect of China Southern joining the oneworld alliance.

Why China Southern may join oneworld

China Southern (by some metrics China’s largest airline) has had an interesting five years:

  • In 2017, American Airlines invested in China Southern, even though the airline belonged to the SkyTeam alliance
  • China Southern then left the SkyTeam alliance in 2019, after having been a member for 10 years; this came around the same time that Delta invested in SkyTeam member China Eastern, meaning there was little value remaining for China Southern to stay in the alliance
  • While China Southern hasn’t been in an alliance for the past few years, the airline has been increasingly aligning with oneworld airlines; not only do American Airlines and Qatar Airways have equity stakes in China Southern, but British Airways and Finnair also have commercial agreements with China Southern

That brings us to the latest update. Danny Lee at Bloomberg reports that talks are once again taking place about the possibility of China Southern joining the oneworld alliance. This is according to people familiar with the discussions, though allegedly no final decision has been made. Furthermore, China’s entry restrictions have prevented in-person discussions from taking place regarding this

Pre-pandemic, China was one of the largest and fastest growing international aviation markets. Obviously it would be a huge asset for oneworld to have an airline based in mainland China, as both SkyTeam and Star Alliance have multiple member airlines in mainland China.

At the same time, given that China continues to more or less be cut off from the rest of the world, I can’t say I’m really that invested in this one way or another, since it’s not like most of us will be able to travel to China anytime soon (or would want to, based on the current situation).

Could China Southern join oneworld?

The problem with China Southern joining oneworld

Despite China being cut off from the rest of the world, on the surface it still sounds like a net positive for China Southern to join the oneworld alliance. After all, more alliance airlines are better than fewer alliance airlines. But there’s a major catch.

Cathay Pacific is a founding member of the oneworld alliance, and founding members have veto rights about which airlines can join the alliance. There have been some pretty strong indications that Cathay Pacific isn’t down with China Southern joining the oneworld alliance. After all, Guangzhou and Hong Kong are under 100 miles apart, so this would add quite a bit of competition for Cathay Pacific.

I suppose it’s possible that Cathay Pacific could have had a change of heart since the start of the pandemic, but I doubt it. Similarly, I suppose it’s possible that China Southern could join as a oneworld connect member, but that’s of limited value.

This gets back to a rumor that has been around for years, which is that China Southern would join oneworld and Cathay Pacific would join Star Alliance. The basis of this is that Air China is the second largest investor in Cathay Pacific, so it’s logical for the two airlines to cooperate more on some level. Along the same lines, that also further explains why Cathay Pacific may not want China Southern in oneworld.

At this point I think it’s unlikely that Cathay Pacific leaves oneworld, at least anytime in the near future. I also don’t see Cathay Pacific being down with China Southern joining the alliance.

So my guess is that these will just be continued discussions, and that not much will come of this. Or perhaps China Southern will become a oneworld connect member, which would be a compromise.

I can’t imagine Cathay Pacific would be down for this

Bottom line

Discussions are once again allegedly taking place between China Southern and oneworld, about the possibility of the airline joining the alliance. While oneworld would benefit from having an airline in mainland China, I imagine that Cathay Pacific would veto having a close competitor join the alliance.

So I don’t see this happening, personally, but who knows…

What do you make of the prospect of China Southern joining oneworld?

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  1. iamhere Guest

    Your comments are as usual from the American or western point of view. Many Chinese make up a lot of customers for the alliances and it depends where you are based as to the carrier or alliance you will focus on. Anyway, I think CZ is in the worst position here because they basically now are not with an alliance. They are no longer part of Skyteam but are not part of OneWorld either and...

    Your comments are as usual from the American or western point of view. Many Chinese make up a lot of customers for the alliances and it depends where you are based as to the carrier or alliance you will focus on. Anyway, I think CZ is in the worst position here because they basically now are not with an alliance. They are no longer part of Skyteam but are not part of OneWorld either and many Chinese think they will become part of OneWorld but they do have OneWorld code-share flights. Further, if they join OneWorld it will make a huge OneWorld cluster for the south of China. On the other hand there are many smaller carriers in China that either a) don't have any partners and just several flights and service smaller destinations or b) are invested by or a subsidiary of a major carrier (it could be to the extent or running operations together (e.g. Shanghai Airlines and China Eastern or Shenzhen Airlines and Air China)).

  2. David Diamond

    The Cathay leaving OW to join *A never seemed like a plausible scenario to me. Why would Cathay leave an alliance where they have veto power, just to join another alliance where they have Shenzhen Airlines, EVA, Air China, ANA, Singapore Air, Thai Airways all fighting for regional and international connections?

  3. JW Guest

    People here seem to forget the fact that the largest shareholder is Swire Pacific and that Qatar Airways has an almost 10% share in CX, no way QR will allow CX to leave for *A unless communist China asks for it.

  4. LEo Diamond

    Keep in mind that DOT hasn't used any of their CAN destinated slots yet based on the US-China Air Agreement, while CZ used all of their assigned CAN-based slots to the extent that they are flying CAN-CSX-LAX and CAN-WUH-SFO just to use Zone 2 slots instead of the limited Zone 1 slots. If CZ joins OW, likely AA can operate ORD-CAN/LAX-CAN to relieve/free up some CZ slots.

  5. LEo Diamond

    No way CZ could not join, as QR,BA,AA all have some stocks/interests in CZ.

  6. LEo Diamond

    I think this is beneficial for all parties except CX, for members, regardless of whether you are a member of AS and AA, now you can redeem all your miles with CZ, and considering how generous CZ is with award redemption, it will absorb the vast surplus in miles generated in AA and AS from CC and miles sales.

  7. Steven E Guest

    CX would definitely not be wanting this and considering the shenanigans in HKG by the new government I doubt this will happen

  8. Zee Guest

    2 more things you forgot to mention in this article:

    1. China Southern owns 55% of Xiamen Airlines, a Skyteam member. Will Xiamen Airlines also leave Skyteam if China Southern joins Oneworld? It will shift the dynamics in Greater China, as Skyteam so far has the strongest presence in the region.

    2. Less than 50 miles from HKG lies SZX, where Star Alliance member Shenzhen Airlines is based at. If Cathay Pacific wants to join...

    2 more things you forgot to mention in this article:

    1. China Southern owns 55% of Xiamen Airlines, a Skyteam member. Will Xiamen Airlines also leave Skyteam if China Southern joins Oneworld? It will shift the dynamics in Greater China, as Skyteam so far has the strongest presence in the region.

    2. Less than 50 miles from HKG lies SZX, where Star Alliance member Shenzhen Airlines is based at. If Cathay Pacific wants to join Star Alliance, it will also compete with Shenzhen Airlines and the TPE-based EVA Air. Though in the case of Shenzhen Airlines, its mother company Air China might just keep it regional so that Cathay could face less competition and bring more synergy to Star Alliance.

    1. Stanley C Diamond

      I thought Shenzhen Airlines was going beyond regional. They fly to London from Shenzhen on the 330. This did not happen before Air China took over Shenzhen Airlines.

    2. LEo Diamond

      CZ also operate a long-haul base in SZX, PKX and SHE as well as a small international base at both SYX and HAK. MF will join Oneworld likely, as their other stockholders are mainly composed of local governments, which doesn't care which alliance the airline is in as long as all of the metrics met expectation.

  9. Mike O. Guest

    If China Southern does join oneworld, will there even be relationship with CX? Remember, CX has cross-ownership with Air China. I remember watching an interview years ago, a former CX CEO wanted to court China Eastern at the time.

  10. BST Guest

    Terrible airline. No thanks.

    1. BenjaminGuttery Diamond

      YES! And also Starlux of Taiwan. Then we need a Central/Eastern European airline and a Central/South American Airline.

    2. DaBluBoi Guest

      Air Serbia could be a good option for the Balkans, while American could buy stakes in Gol and integrate it into Oneworld

      Doubt Starlux could be incorporated into Oneworld, given Cathay is likely to veto them, as would China Southern if they join

    3. Zee Guest

      I doubt Starlux could survive in the long term. Taiwan is too small of an aviation market. Even South Korea has problem keeping 2 full-service airlines, so I don't see Starlux can survive without one of the Big 2 in Taiwan collapse.

  11. Mango Guest

    It’s almost impossible for an airline with more than 600 aircrafts to become “one world connect” under any circumstances. That’s 2/3 of AA and larger than BA+IB+QR combined. Either fully in or remain status quo. One world connect is for niche players

  12. BenjaminGuttery Diamond

    This is great news! I do hope that CS makes their planes/service more Premium though, OW is a premium brand.

    1. Zee Guest

      They are probably the more premium one among the Big 3 Chinese Airlines. Though I'd say Xiamen Airlines (which ironically is 55% hold by CZ) offers the best overall product among Chinese carriers.

    2. Ethan Guest

      Agree, but MF has hell a shitty FFP.

    3. Andy Diamond

      I agree that China Southern was one of the better choices when travelling to/in China was still possible. I flew them quite often on short-/mid-haul routes and rather enjoyed it.

      Now, I think the entire discussion is sort of obsolete, because China is closed and will most likely stay so. This also reduces the potential benefits of joining a global alliance to virtually zero.

  13. John T Guest

    This is probably quite an outdated view given Royal Air Maroc is now a member, but Oneworld has always been a more premium alliance than Star or Sky.
    All the mainland Chinese airlines are horrible and don't have the premium reputation that most Oneworld member airlines do. I've always thought that as much as Oneworld would love more members, they only want premium ones and a mainland Chinese carrier is unlikely to fit the brief (whereas Cathay does perfectly).

    1. John Guest

      @John T

      Star Alliance and OneWorld are broadly the same in terms of 'premium' members. There's no way OW outweighs Star in the premium stakes. I've flown business class in all Star airlines and all but two from OW. I would not favour OW over Star, or vice versa. But I would say that SkyTeam (with a few honorable exceptions) is indeed the horrible leftovers alliance.

  14. Icarus Guest

    A truly awful carrier. Customer services is a disaster with no idea, in addition to poor inflight service and smoking crew .

    A few years back I was delayed on a domestic from Chengdu due to an issue closing the cargo door, with a connection on the same ticket.

    They kept insisting they weren’t responsible to rebook as it was a delta ticket.

    I explained it was their delay and they...

    A truly awful carrier. Customer services is a disaster with no idea, in addition to poor inflight service and smoking crew .

    A few years back I was delayed on a domestic from Chengdu due to an issue closing the cargo door, with a connection on the same ticket.

    They kept insisting they weren’t responsible to rebook as it was a delta ticket.

    I explained it was their delay and they were adamant which resulted in me missing two options to Paris and Amsterdam.

    In the end a very nice Air France manager took control and rebooked me the next day. I wrote to China southern to claim overnight costs and they refused saying it wasn’t their responsibility.

    It seems this was a regular issue not exceptional.

    I also believe they were asked not to extend their SkyTeam contract.

  15. Sum Fing Wong Guest

    Ultimately Cathay will do whatever they’re told to do by the Chinese government, because if they don’t, they’ll be ruined

    1. Pierre Gold

      CX has ALREADY been ruined by China and its plague pestilence imposed on the world. Cathay is now 10%, maybe 20, of its former self. Of course the only decent "Chinese" airline was Cathay, especially after the inclusion of Dragonair and after China's heavy-handed and illegal-per-all-treaties conquest and submission of Hong Kong which is now a shadow of what it one time was under Britain's benevolent and free-reigning tutelage.

      Yes, they will do as they...

      CX has ALREADY been ruined by China and its plague pestilence imposed on the world. Cathay is now 10%, maybe 20, of its former self. Of course the only decent "Chinese" airline was Cathay, especially after the inclusion of Dragonair and after China's heavy-handed and illegal-per-all-treaties conquest and submission of Hong Kong which is now a shadow of what it one time was under Britain's benevolent and free-reigning tutelage.

      Yes, they will do as they are told, possibly even becoming a merged airline with China Southern, who knows ?

      The right thing to do, but it won't happen, would be to slam the door shut at any attempt by a Chinese Airline (except of course China Airlines) to join any alliance, but since was not done for Saudia (another justifiable pariah) by Skyteam, I do not see it happening in this instance.

    2. Zee Guest

      Cathay had been going downhill for years even during the pre-pandemic era. The catering in business and economy class had been meager and many mainland Chinese passengers had reported discriminatory attitudes from Cathay cabin crew towards Mandarin-speaking passengers regardless of cabins.

      One of the major reasons I guess was probably due to its major oil hedge loss in the mid-2010s, which forced it to cut many costs that once made it a premium airline.

  16. JS Guest

    A mainland Chinese airline in the oneworld alliance could be a big rescue for Finnair (and Helsinki airport) in the current state of things, assuming that China ever reopens from the pandemic.
    They could use Helsinki as a focus city in Europe and partner with Finnair for the connecting traffic. Helsinki airport is already built with this kind of operations in mind, but Finnair cannot fly over Russia, whereas Chinese airlines can.
    Finnair...

    A mainland Chinese airline in the oneworld alliance could be a big rescue for Finnair (and Helsinki airport) in the current state of things, assuming that China ever reopens from the pandemic.
    They could use Helsinki as a focus city in Europe and partner with Finnair for the connecting traffic. Helsinki airport is already built with this kind of operations in mind, but Finnair cannot fly over Russia, whereas Chinese airlines can.
    Finnair will still have to cut down on its long-haul equipment, given that the relations with Russia won't be getting better anytime soon.

    1. LEo Diamond

      Chinese airline and Chinese all like direct, non-stop flight to their destination, they like to avoid stopping at all cost.

  17. Tim Dunn Diamond

    A simple alliance relationship won't change anything without a joint venture and the US only allows JVs with countries that have Open Skies. Neither HKG or China (which have separate air service treaties with the US) are not going to agree to Open Skies.
    Joint ventures are of the most benefit to airlines that are willingt o serve entire regions which Japan and S. Korea do for E. Asia - and those countries have...

    A simple alliance relationship won't change anything without a joint venture and the US only allows JVs with countries that have Open Skies. Neither HKG or China (which have separate air service treaties with the US) are not going to agree to Open Skies.
    Joint ventures are of the most benefit to airlines that are willingt o serve entire regions which Japan and S. Korea do for E. Asia - and those countries have Open Skies with the US, allowing AA, DL and UA to have JV partnerships where the most traffic can be connected.
    China and HKG competed for connecting traffic from the US to outside China before covid but the A350 and B787 make it possible to fly the entire Pacific Rim - and less advantageous to connect traffic over a JV if it can be flown nonstop. Seoul and Tokyo both have far greater connecting potential than Chinese airports to non-Chinese destinations.

    1. Tom Guest

      Believe it or not, there are actually passengers that want to fly other places than the US. A truly shocking thought for some of the more small minded US citizens, I know...

    2. Tim Dunn Diamond

      Tom,
      I have no idea where you came up with the idea to support what you just said - but it surely wasn't in my post.
      ConcordeBoy,
      Concorde Boy,
      it is hard to believe that anyone would believe that any city in China is geographically superior as a connecting hub from N. America to East Asia; Japan is clearly the best positioned country geographically followed by S. Korea (N. Korea would...

      Tom,
      I have no idea where you came up with the idea to support what you just said - but it surely wasn't in my post.
      ConcordeBoy,
      Concorde Boy,
      it is hard to believe that anyone would believe that any city in China is geographically superior as a connecting hub from N. America to East Asia; Japan is clearly the best positioned country geographically followed by S. Korea (N. Korea would work if it weren't for politics). THEN some of the cities of NE China would be in line.
      And, no, HKG did not carry more international connecting traffic than ICN or both Tokyo airports.

    3. ConcordeBoy Diamond

      Meh, they could always take the USA-Japan route, and produce a bilateral a cacophony of restrictions+limitations while hilariously still calling it "open skies," thus allowing further competition.

      That, and don't know why you're including HKG with the domestic PRC airports in regard to int'l connections, particularly relative to ICN/TYO, considering that it was a significantly busier international connector (and better geographically positioned for it, for N.American originating traffic) than either of them, prior to the...

      Meh, they could always take the USA-Japan route, and produce a bilateral a cacophony of restrictions+limitations while hilariously still calling it "open skies," thus allowing further competition.

      That, and don't know why you're including HKG with the domestic PRC airports in regard to int'l connections, particularly relative to ICN/TYO, considering that it was a significantly busier international connector (and better geographically positioned for it, for N.American originating traffic) than either of them, prior to the pandemic.

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Dn10 Guest

Aer Lingus needs to join OneWorld

4
Zee Guest

2 more things you forgot to mention in this article: 1. China Southern owns 55% of Xiamen Airlines, a Skyteam member. Will Xiamen Airlines also leave Skyteam if China Southern joins Oneworld? It will shift the dynamics in Greater China, as Skyteam so far has the strongest presence in the region. 2. Less than 50 miles from HKG lies SZX, where Star Alliance member Shenzhen Airlines is based at. If Cathay Pacific wants to join Star Alliance, it will also compete with Shenzhen Airlines and the TPE-based EVA Air. Though in the case of Shenzhen Airlines, its mother company Air China might just keep it regional so that Cathay could face less competition and bring more synergy to Star Alliance.

2
Icarus Guest

A truly awful carrier. Customer services is a disaster with no idea, in addition to poor inflight service and smoking crew . A few years back I was delayed on a domestic from Chengdu due to an issue closing the cargo door, with a connection on the same ticket. They kept insisting they weren’t responsible to rebook as it was a delta ticket. I explained it was their delay and they were adamant which resulted in me missing two options to Paris and Amsterdam. In the end a very nice Air France manager took control and rebooked me the next day. I wrote to China southern to claim overnight costs and they refused saying it wasn’t their responsibility. It seems this was a regular issue not exceptional. I also believe they were asked not to extend their SkyTeam contract.

2
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