LONDON – The SkyTeam Alliance faced an unexpected blow this week as its Chinese member, China Southern Airlines (CZ), announced that it would not be renewing its partnership with the group.
China Southern is the biggest airline in China measured by passengers carried. It is also owner of SkyTeam member, Xiamen Air.
The Guangzhou-based carrier said it will be leaving the alliance on January 1, 2019, to focus on seeking alliances with other carriers outside of SkyTeam.
“The company will explore the possibilities to establish new partnerships with advanced airlines around the world, promote bilateral and multilateral cooperation and provide quality services to passengers around the world,” said the airline in a statement.
Sources suggest that CZ is discussing joint venture and codesharing arrangements with the likes of British Airways (AA) and American Airlines (AA), to which the Chinese carrier sold a minority stake
Potential Oneworld Swap?
China Southern sold a 2.68% stake to AA back in 2017, worth $200 million. The Dallas-based carrier has recently divested its presence in China by canceling some of its routes to the country.
American Airlines’ service between Chicago (ORD) and Shanghai-Pudong (PVG) in China was suspended in October because of “the current fuel and competitive environment.”
This route cancellation came two months after the airline announced the termination of its Chicago-Beijing (PEK) service, which ran until October 20.
Even though AA canceled these routes, it obtained a dormancy waiver from the U.S. Department of Transportation (DOT) for the routes authority to China.
But now, with China Southern out of SkyTeam and open for a potential deeper collaboration, AA might find itself flying back to China.
On top of this, the Chinese carrier has active codeshare agreements with both BA and Qantas (QF), both of which are important Oneworld members.
China Southern has been a member of SkyTeam since November 2007 as the eleventh member of the alliance.
The carrier has a fleet of 588 aircraft offering services to 208 destinations globally.
“China Southern’s decision reflects its strategic development, the changing trends of the global aviation industry and the evolution of alliances,” said SkyTeam via a public statement.
China Southern’s departure from SkyTeam seems to have been a long time coming, with rumors dating back to November 2017 when DL finalized its investment in MU.
What’s Left For SkyTeam?
With China Southern’s departure, SkyTeam will only have one Chinese carrier remaining in the alliance.
China Eastern (MU), partially owned by Delta Air Lines (DL) and the Air France-KLM Group, will be the alliance’s sole representant in the ever-growing Chinese market.
Delta invested a hefty $450 million into Shanghai-Pudong-based China Eastern Airlines in September 2015.
Even though China Southern has publicly said that it’s looking to team up with other carriers, it is very likely that a deeper collaboration with Oneworld might occur, especially with AA pushing hard to keep its traffic rights to China open.