China Southern Airlines - first mainland carrier into a global alliance

ข่าวทั่วไป Thursday November 15, 2007 09:36 —PRESS RELEASE LOCAL

Bangkok--15 Nov--Centre for Asia Pacific Aviation China Southern Airlines will achieve a symbolic “coming of age” breakthough for the Chinese aviation industry when it joins the SkyTeam Alliance today. It has been a long road for China Southern, which signed an initial Letter of Intent to join the global grouping back in 2004. Serious preparations with other member airlines have been under way since the 28-Jun-06 signing of the binding Global Airline Alliance Adherence Agreement. The SkyTeam Alliance has ten members, including Air France, Delta Air Lines and Korean Air with a total fleet, prior to China Southern’s entry, of over 2,000 aircraft, offering 15,000 flights per day to 728 destinations in 149 countries and territories. The Guangzhou and Beijing based airline is a massive addition, by any calculation. Controlling a third of the Chinese aviation market, China Southern will have a fleet of 300 aircraft by the end of this year and will add 66 more in 2008. In the past 12 months, it has committed to 100 more narrowbody jets to serve its pan-China network. It handled 42.7 million passengers in the first nine months of 2007 (last year’s 49 million ranked it ninth in terms of total passenger numbers globally). Only 20% of China Southern's revenues come from international routes, so SkyTeam membership will provide a major benefit for the carrier. The airline plans to launch at least ten new overseas routes in its own right before the Beijing Olympics in 2008, taking on Air China, the mainland's largest international carrier. But it is access to the massive Chinese market that is the key for the global alliances. oneworld has been the most active to date in China, with a presence over the last eight years in Hong Kong via Cathay Pacific, although Cathay has, until recently, had limited access to Mainland markets. The big breakthrough for oneworld only came this month as Dragonair, a member of the Cathay Pacific group since last year, joined the oneworld alliance on 04-Nov-07 as an affiliate member. Dragonair’s accession instantly added 15 new destinations to oneworld’s existing network, including 12 in Mainland China. More activity will quickly follow. Air China and Shanghai Airlines will join the Star Alliance in mid-Dec-07. But big question marks remain over the third pillar, China Eastern’s alliance plans. The carrier, along with Hainan Airlines, is known to have held discussions with oneworld in the past. However, its strategic alliance with Star Alliance member, Singapore Airlines (SIA) clouds the issue (as Star, with Shanghai Airlines on board, would have the unprecedented and unlikely situation of two member carriers from the same city). No mention was made of alliance plans in the definitive ‘Strategic Cooperation Agreement' announced by SIA and China Eastern this week. But SIA stated that the carriers have distinct route networks that are complementary, and this provides for "many opportunities for marketing cooperation, such as twinning of the Singapore and Shanghai hubs”. Codesharing on all services between Singapore and Shanghai is planned, as are joint operations beyond both airlines’ respective hubs, of which SIA stands to be the greatest beneficiary, particularly on trans-Pacific routes. According to SIA, “through such cooperation, SIA and China Eastern will improve convenience, accessibility and choice for consumers in Singapore and China, and assist China Eastern to make Shanghai the premier air hub in China”.

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