China Southern to leave SkyTeam in January 2019

China Southern to leave SkyTeam in January 2019

China Southern is quitting the SkyTeam, in a move which robs the alliance of its largest Chinese partner and is sure to encourage rumours that the Guangzhou-based airline could join Oneworld.

A media statement issued by SkyTeam said "China Southern’s decision reflects its strategic development, the changing trends of the global aviation industry and the evolution of alliances."

"China Southern has decided not to renew its contract with SkyTeam, the global airline alliance, as of 1 January 2019," the alliance said.

"SkyTeam and China Southern have agreed to work closely together to ensure a seamless transition for all customers and partners. That process will run throughout 2019 and will complete by the year-end."

This process will include managing the impact of earning and using frequent flyer miles and airport lounge access.

China Southern said in a statement that it will seek partners outside of the alliance to build up a global network.

SkyTeam's remaining airlines in mainland China are Shanghai-based China Eastern and ther smaller Xiamen Airlines; the alliance also counts Taiwan's China Airlines as a member.

Beijing-based Air China belongs to the Star Alliance and has a stake in Cathay Pacific, a Oneworld member.

China Southern joined SkyTeam in 2007 and has direct flights to its Guangzhou hub from Sydney, Melbourne, Brisbane, Adelaide and Perth. In addition to bringing business travellers into the heart of China's Pearl River Delta manufacturing region, the airline also offers onwards connections across Europe and the UK. 

In the past two years, China Southern has increasingly branched out to non-SkyTeam members for partnerships. In addition to the minority stake sold to American Air, it’s in talks to upgrade its code-share agreement with British Airways into a joint venture. Both BA and American are members of the Oneworld family.

Meanwhile, domestic rival China Eastern has been seeking closer ties with other SkyTeam members including Delta Air Lines and Air France/KLM through mutual stake investments, leaving China Southern in an awkward situation within the alliance.

Additional material by Bloomberg

David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
 

18 comments

  • PERflyer

    PERflyer

    15 Nov, 2018 10:12 pm

    Can’t imagine CX will be too impressed if they do join OW.
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  • Lachlan Burnet

    Lachlan72

    15 Nov, 2018 10:15 pm

    Not sure how Cathay are going to feel about a huge rival with their base so close to HKG joining OW? If CZ do join OW that may prompt CX to leave the alliance and join Star? Interesting times ahead in 2019, that's for sure.
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  • Aleks Popovic

    SYDINI

    16 Nov, 2018 02:35 am

    I can picture this being a problem if they want to join another alliance as SQ/CA wouldn’t be happy, and CX would be in the same boat. MU and QF would have challenges with their alliance and partnership. It’s unlikely and we can just speculate. But time will tell.
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  • Eli

    Eli

    16 Nov, 2018 06:57 pm

    Really? Join Star will ALL the other Asian carriers!!
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  • Eli

    Eli

    16 Nov, 2018 06:58 pm

    CZ and CX could exist comfortably side by side...and also reap benefits if CX looks at it the right way. Will take CZ awhile to catch up to CX's service standards anyway.
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  • Dan

    DanV

    15 Nov, 2018 10:25 pm

    CX would increasingly likely use their veto to block CZ's entry into Oneworld if any of the Oneworld carriers try to sponsor CZ's entry.

    Saying that, I'm tipping CZ would probably remain on the outer and seek more JVs with Oneworld and Star Alliance members.
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  • Cameron Hocking

    blingwad

    15 Nov, 2018 11:02 pm

    Interesting QF have partnerships with both CZ and MU. Hedging their bets perhaps
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  • moa999

    moa999

    16 Nov, 2018 02:37 pm

    Think just reflects connections from HKG and PVG, particularly given China's loose one airline per route policy.

    Believe QF just has codeshares with CZ, a little closer with MU
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  • percysmith

    percysmith

    16 Nov, 2018 12:54 am

    Perhaps CX can be threatened with expulsion?
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  • James Zhang

    pkjames

    16 Nov, 2018 07:51 am

    cx will just taken over by ca and everyone is happy.

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  • Patrick Wallis

    Patrick Wallis

    16 Nov, 2018 08:49 am

    CX is no longer a premium airlines, all they know is cutting cost and cutting cost... CZ exiting ST is a good thing as MU is increasingly making CZ uncomfortable. CZ can utilise this opportunity to better themselves. Yet it’s a government owned corp, thus no need to be too optimistic about it.
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  • koji

    koji

    16 Nov, 2018 09:58 am

    Mind asking CX for further comment? Interested to see how they will response at this stage. With the rumor that QR is leaving ow, I really don’t want to lose another premium and flagship airline of OW.
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    Elijah

  • Tristan

    tris06

    16 Nov, 2018 12:41 pm

    Also people are overlooking the fact that Shenzhen airport is also a major hub for cz and it is equally the largest carrier with Shenzhen airlines (Star Alliance). CZ would definately not join Star Alliance as Air China's takeover of Shenzhen airlines was to build its own network from Southern China. Also with China Southern at Shenzhen airport gradually increasing its long haul network and also using Shenzhen as a transit point to chinese destinations from outside China, I can only think year by year CX will suffer more from CZ being in the same . If it is true that CX has a veto vote, for CX's survival they should use the veto as this could otherwise send CX into bankrupcy. So I see it is quite likely CZ will not join and will just be free to make agreements with select airlines. Skyteam geographically was the only alliance that made sense. Yes Xiamen and Eastern are in China but they are Still 1000kms or 2000kms away from their biggest hub. Oneworld competitor CX is 150 or even just 30kms away (if You consider adding szx).

    And as I said above Star Alliance even less sense though both are nearly as bad as each other.
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  • Nick  Sydney 348

    Nick Sydney 2

    16 Nov, 2018 01:47 pm

    Much speculation on CZ but I do hope that CX don't leave OW as travelling through HK and use of those CX lounges along with the QF lounge there is one of travelling life's pleasures.
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  • fxdxdy

    fxdxdy

    16 Nov, 2018 01:55 pm

    They sounds like a prime candidate for OneWorld Connect if 'building their own network of partners' is what they want to do.
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  • KK

    KK

    16 Nov, 2018 07:12 pm

    Any chance CZ would merge with MU or CA?
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  • lvtravel01

    lvtravel01

    16 Nov, 2018 10:34 pm

    @kk cn government says no...
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  • X

    X

    17 Nov, 2018 04:00 am

    I feel that a breakaway from a group of allies created for economical benefit needs a catchy name. CZxit???
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Guest

22 Jul, 2019 05:59 am

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