MIAMI — The new year brings some revealing news, with Qatar Airways announcing a 5% investment in China Southern Airlines. The Chinese carrier, which is now effectively out of the SkyTeam Alliance, becomes the newest member of the Qatar Airways portfolio of investments. Currently, the Qatari carrier owns stakes in IAG (20%), Cathay Pacific (9.99%), LATAM (10%), and Air Italy (49%).
China Southern said that its departure from SkyTeam would allow them to “explore possibilities to establish new partnerships with advanced airlines around the world, promote bilateral and multilateral co-operation, and provide quality services to passengers around the world.”
Since then, the airline has struck significant deals with American Airlines (AA), and now Qatar Airways (QR)—both members of the oneworld Alliance.
According to the Doha-based carrier, the transaction is based on an on-market purchase of certain A shares and H shares of China Southern Airlines.
“Qatar Airways regards our shareholding in China Southern Airlines as an important part of our strategic investment in the largest airline in one of the world’s fastest-growing aviation markets,” said Qatar Airways’ Chairman, Ali Shareef Al Emadi.
According to the Chinese carrier, a further investment from Qatar Airways might come in within the next year.
Following China Southern’s departure from SkyTeam, AA pursued and secured a strong codesharing agreement with the Asian carrier last month. Both carriers expect that once approved by regulatory parties, the first codeshare flight will take off in early 2019.
The new code-share agreement between both carriers puts the AA code on all China Southern flights to and from the United States, and vice-versa. Moreover, both carriers will place their codes on each of their extended domestic services.
Qatar Airways CEO, Akbar Al Baker, said that “China Southern Airlines is one of the most prestigious airlines in the Chinese domestic market and an important market player in the world, with massive potential for cooperation in the future.”
“There are opportunities for us to work together and build a long-term relationship in ways that would bring benefits to customers of both airlines,” added Al Baker.
Interestingly, however, Qatar Airways now owns shares in both China Southern and its neighboring competitor, Cathay Pacific.
Arguably, this could be a strong move by the Doha-based carrier into the Chinese domestic market. Currently, China Southern is Asia’s largest carrier by fleet size, and also China’s largest domestic operator.
By securing a 5% investment, with room for a potential increase in shares, Qatar Airways is positioning itself as a dominant figure in the ever-growing Chinese market.