China Southern just announced on Chinese social media that they will exit SkyTeam in 2019 to deepen cooperation with AA but no mention of oneworld. Also no mention of CZ subsidiary MF but can't expect it to remain in SkyTeam if the parent company leaves.

when CX leave OW?

chunhimlai wrote:

when CX leave OW?

Probably not going to happen as recently the have strengthen the OW ties (Eg Qantas codeshare).

CZ and CX even though closely located, probably don't compete as there markets are different.

Pcoder wrote:

chunhimlai wrote:

when CX leave OW?

Probably not going to happen as recently the have strengthen the OW ties (Eg Qantas codeshare).

CZ and CX even though closely located, probably don't compete as there markets are different.

Perhaps it's not as simple as that. It's no secret that CX has been blocking any oneworld recruitment of a Mainland carrier over the years. The question is if they have changed their mind or if they are planning to leave anyway. Their cross shareholding with CA would make more sense if they are in the same alliance, not to mention they have picked up NZ, AC, LH, OS, LX, ZH as partners in recent years. The problem is of course if a number of *A members, such as SQ, would veto such a move. Regardless, I am sensing more breaking news in 2019.

This is a bit of a blow to SkyTeam but let us be honest, the alliances seem to be loosening and unraveling over time.

Guangzhou isn't an highly-premium market though, and Cathay are great at being commercially aggressive so I think they'll do well. And there's no way Cathay will let CZ into OW (they're prickly enough about Qantas, let alone airlines right next door).

Not to mention, Guangzhou isn't really a good place for connecting into mainland China from the USA (Beijing and Shanghai are far better situated in that regard... So's Tokyo honestly, but I don't think AA gives JAL much connecting traffic).

Presumably, this will allow AA to focus on Beijing and Shanghai, directing HK pax onto Cathay. And providing a cheaper option for leisure travelers that will use China Southern rather than Cathay to connect to South East Asia. At the same time it gives China Southern access to AA's network, but is AA's network better than Delta's?

Can confirm. Official release from Skyteam: https://www.skyteam.com/en/about/press- ... -Southern/

It will be interesting to see where CZ ends up.

Pcoder wrote:

chunhimlai wrote:

when CX leave OW?

Probably not going to happen as recently the have strengthen the OW ties (Eg Qantas codeshare).

CZ and CX even though closely located, probably don't compete as there markets are different.

I agree CX has deepened ties with Qantas (which is surprising since typically CX and QF have had a less-than-snugglecuddles relationship for a long time), but CX does have quite a bit of connecting traffic. Leisure-centric connecting traffic will defect from CX (and out of HKG) to CZ because CZ has lower fares. That said this has the advantage of potentially relieving some congestion at HKIA (which was absolutely packed last time I was there).

Announcement from Hong Kong Stock Echange

I sense CZ will probably remain on the outer and may look to do more JVs with a number of Oneworld members, some Star Alliance and unaligned members.

In regards to CZ and Oneworld, there's still the potential CX veto to deal with considering CX has been strengthing relationships including a recent JV with long time frenemy turned partner QF. This is despite a number of JVs/codeshares between CX and a large number of Star Alliance members.

Keep in mind the increasing amount of cross-Alliance JVs may possibly render Alliances in general irrelevant in the medium to long term. The major alliances had to introduce the "Connecting Partners" model in an attempt to stay relevant in the short term.

SkyTeam had too many Mainland carriers already: CZ, MU and MF, not to forget FM. They failed to add too much value to the alliance, not to mention that alliances themselves have plateaued in importance. If Oneworld does manage to allow room for both CZ and CX, it can take a stranglehold on the Pearl River Delta, combining Asia's largest airline (by fleet size) with one of its most premium (by popular perception). This also shows that AA and DL are the biggest kingmakers within their respective alliances.

This will be the first big exit of an airline from an alliance in years that isn't due to a shutdown. I believe FM (Shanghai Airlines) was the last one in 2011 (TAM and US Airways should not be considered).

As someone already mentioned, the loss of CAN from CZ's exit is not that big a deal given the relative lack of premium traffic at that hub. CZ's other focus has been PEK (or soon, the new Daxing) but that should also be well covered by MU who will be the other anchor tenant at Daxing. Some of the existing bilateral JVs between CZ and Skyteam members such as KL or AF) will likely remain as long as CZ remains outside another alliance.

They are now more freedom to build something nice at the new Beijing airport unless Air China/Chinese authorities block them.
PEK-LAX with A380s? that would be great.

This is very good news indeed - CZ is on the up and they have figured out they are better out of Skyteam. Looking forward to further developments. Agree they may not jump into another existing alliance.

This is not really a surprise, but still an interesting development.

This got me thinking, when was the last addition to ST, OW or Star Alliance?

IndianicWorld wrote:

This is not really a surprise, but still an interesting development.

This got me thinking, when was the last addition to ST, OW or Star Alliance?

In 2014: Air India joined Star Alliance, Sri Lankan joined Oneworld and Garuda Indonesia joined SkyTeam. After 2014, no airline has joined these alliances.

QuawerAir wrote:

IndianicWorld wrote:

This is not really a surprise, but still an interesting development.

This got me thinking, when was the last addition to ST, OW or Star Alliance?

In 2014: Air India joined Star Alliance, Sri Lankan joined Oneworld and Garuda Indonesia joined SkyTeam. After 2014, no airline has joined these alliances.

No full member has joined an alliance since AI in July 2014, but, if affiliates and Connect(ing Partners) are to be considered, O6 (Avianca Brasil) joined Star in 2015, HO (Juneyao) joined Star in 2017 and FJ will join Oneworld in due course. CZ may very well break the drought of airlines joining alliances, especially at the smallest of the Big Three alliances, which lost another member last year (AB ceased operations).

I really don't see a CX veto. They have to see the writing on the wall that Mainland carriers are just going to carry traffic directly in the future and won't rely on CX, even for cross strait traffic. They're just different models, too. CX wants to make their money on premium traffic while CZ is fine with volume of economy.

Pcoder wrote:

CZ and CX even though closely located, probably don't compete as there markets are different.

Hmm . . . that may have been true in the past, but things have/are changing rapidly. I go to that part of the world at least a couple times a year now. Hong Kong is not the Asian financial powerhouse it once was (Beijing is working hard to promote Shanghai). Industry and infrastructure is much greater in Shenzhen and Guangzhou. And the new high speed train and Macau bridge are going a long way to physically and culterally integrating Hong Kong and the mainland, no matter how much the citizens of Hong Kong resist. For good or bad, Hong Kong is fading fast as a differentiated/separate region.

I don't see CZ bound for Oneworld. What evidence do we have of this?

VTCIE wrote:

QuawerAir wrote:

IndianicWorld wrote:

This is not really a surprise, but still an interesting development.

This got me thinking, when was the last addition to ST, OW or Star Alliance?

In 2014: Air India joined Star Alliance, Sri Lankan joined Oneworld and Garuda Indonesia joined SkyTeam. After 2014, no airline has joined these alliances.

No full member has joined an alliance since AI in July 2014, but, if affiliates and Connect(ing Partners) are to be considered, O6 (Avianca Brasil) joined Star in 2015, HO (Juneyao) joined Star in 2017 and FJ will join Oneworld in due course. CZ may very well break the drought of airlines joining alliances, especially at the smallest of the Big Three alliances, which lost another member last year (AB ceased operations).

did yoy forget Qatar Airways and Shenzhen？

chonetsao wrote:

VTCIE wrote:

QuawerAir wrote:

In 2014: Air India joined Star Alliance, Sri Lankan joined Oneworld and Garuda Indonesia joined SkyTeam. After 2014, no airline has joined these alliances.

No full member has joined an alliance since AI in July 2014, but, if affiliates and Connect(ing Partners) are to be considered, O6 (Avianca Brasil) joined Star in 2015, HO (Juneyao) joined Star in 2017 and FJ will join Oneworld in due course. CZ may very well break the drought of airlines joining alliances, especially at the smallest of the Big Three alliances, which lost another member last year (AB ceased operations).

did yoy forget Qatar Airways and Shenzhen？

Qatar joined in 2013 and Shenzhen in 2012. These are both before 2014

Aither wrote:

They are now more freedom to build something nice at the new Beijing airport unless Air China/Chinese authorities block them.
PEK-LAX with A380s? that would be great.

Talking about new Beijing airport, if CZ join oneworld then all oneworld airlines will most probably be asked to move to ZBAD together with them and that might be undesirable to some airlines. Because ZBAD is further out and thus less convenient despite there is a high speed rail connection which help lessen the disadvantage.
AA will move to ZBAD, but I am not sure about how many other airlines would like to see their flights being forced to move to Beijing-version-LGW from Beijing-version-LHR just because CZ is going to join their alliance.

VTCIE wrote:

QuawerAir wrote:

IndianicWorld wrote:

This is not really a surprise, but still an interesting development.

This got me thinking, when was the last addition to ST, OW or Star Alliance?

In 2014: Air India joined Star Alliance, Sri Lankan joined Oneworld and Garuda Indonesia joined SkyTeam. After 2014, no airline has joined these alliances.

No full member has joined an alliance since AI in July 2014, but, if affiliates and Connect(ing Partners) are to be considered, O6 (Avianca Brasil) joined Star in 2015, HO (Juneyao) joined Star in 2017 and FJ will join Oneworld in due course. CZ may very well break the drought of airlines joining alliances, especially at the smallest of the Big Three alliances, which lost another member last year (AB ceased operations).

O6 joined *A as a full member due to different ownership structure from AV.

*A is also due to announce additional Connecting Partners from Asia and Europe in the next 6-12 months.

tacobell101 wrote:

Can confirm. Official release from Skyteam: https://www.skyteam.com/en/about/press- ... -Southern/

It will be interesting to see where CZ ends up.

I suspect as a de facto OW member, but not officially because of CX.

Will CZ's codeshare with DL, KLM, AF comes to the end soon?

Another thing - CX nearby competitor Shenzhen Airlines based in SZX is already in Star Alliance, this mean CX joining to Star may not be possible!

It will be interesting to see what happens with MSP-PVG and ATL-PVG as I am sure both routes rely on feed from CZ at PVG.

SQ789 wrote:

Another thing - CX nearby competitor Shenzhen Airlines based in SZX is already in Star Alliance, this mean CX joining to Star may not be possible!

unlike oneworld, every member in SA can exercise veto.(for oneworld, only founding members have veto right), I do not see TG, SQ and BR welcome CX.
.

klm617 wrote:

It will be interesting to see what happens with MSP-PVG and ATL-PVG as I am sure both routes rely on feed from CZ at PVG.

MU provides feeds, not CZ. MU’s very existence is why cZ wants to leave.

klm617 wrote:

It will be interesting to see what happens with MSP-PVG and ATL-PVG as I am sure both routes rely on feed from CZ at PVG.

MU provides feeds, not CZ. MU’s very existence is why cZ wants to leave.

SQ789 wrote:

Another thing - CX nearby competitor Shenzhen Airlines based in SZX is already in Star Alliance, this mean CX joining to Star may not be possible!

Parent company of Shenzhen Airlines is also 2nd largest shareholder and JV partner of CX

Even if CX block it, the other OW partners are going to push for this, especially AY, AA and BA/IB. Perhaps also QF.
CZ is a huge airline, the largest in Asia and it has hubs all over the PRC through own operations and subsidiaries.
The CAN hub is one thing, but they have much more than that. They really have a dozen hubs and the customer base they have would take OW to a completely different level.
For CX, CZ is already big competition today, so they only have to gain by working together on network strategies. It's better to be friends with your neighbor than to hit each other to death.
In fact, pax originating from the area stand to benefit from CX's large international network.

Looking at the below, you can see that CZ is growing internationally, but the domestic growth is also huge in terms of passenger numbers. That's a lot of exposure for OW.

https://www.statista.com/statistics/234 ... -airlines/

I think that CZ will join OW. Otherwise there was no reason for them to leave Skyteam.
Perhaps this has something to do with QR's willingness to leave OW.
QR's Chinese presence could be in jeopardy and that's not small fish.

klm617 wrote:

It will be interesting to see what happens with MSP-PVG and ATL-PVG as I am sure both routes rely on feed from CZ at PVG.

Why? You don't think there's destination traffic to PVG?

MIflyer12 wrote:

klm617 wrote:

It will be interesting to see what happens with MSP-PVG and ATL-PVG as I am sure both routes rely on feed from CZ at PVG.

Why? You don't think there's destination traffic to PVG?

No I think that both of these flights depend on onward connections at PVG. ATL-PVG has failed 2 times before this and I think that Delta was using onward PVG connections to make it viable. I think the O/D market is adequately covered over DTW and SEA by Delta.

They are joining One World very soon.

British Airways and American Airlines are a great match for them.

klm617 wrote:

MIflyer12 wrote:

klm617 wrote:

It will be interesting to see what happens with MSP-PVG and ATL-PVG as I am sure both routes rely on feed from CZ at PVG.

Why? You don't think there's destination traffic to PVG?

No I think that both of these flights depend on onward connections at PVG. ATL-PVG has failed 2 times before this and I think that Delta was using onward PVG connections to make it viable. I think the O/D market is adequately covered over DTW and SEA by Delta.

No. Even a quick look at Wiki makes it clear China Eastern is the PVG carrier. CZ has a decent size operation, but will have a negligible effect on DL's operation at PVG...despite your wishes otherwise.

https://en.wikipedia.org/wiki/Shanghai_ ... stinations

I imagine the rest of Skyteam is like ¯\_(ツ)_/¯, CZ was certainly one of the worse products in Skyteam.

jbs2886 wrote:

klm617 wrote:

MIflyer12 wrote:

Why? You don't think there's destination traffic to PVG?

No I think that both of these flights depend on onward connections at PVG. ATL-PVG has failed 2 times before this and I think that Delta was using onward PVG connections to make it viable. I think the O/D market is adequately covered over DTW and SEA by Delta.

No. Even a quick look at Wiki makes it clear China Eastern is the PVG carrier. CZ has a decent size operation, but will have a negligible effect on DL's operation at PVG...despite your wishes otherwise.

https://en.wikipedia.org/wiki/Shanghai_ ... stinations

Sigh, what was this like 10 posts before this became a DTW thread :/

YouGeeElWhy wrote:

jbs2886 wrote:

klm617 wrote:

No I think that both of these flights depend on onward connections at PVG. ATL-PVG has failed 2 times before this and I think that Delta was using onward PVG connections to make it viable. I think the O/D market is adequately covered over DTW and SEA by Delta.

No. Even a quick look at Wiki makes it clear China Eastern is the PVG carrier. CZ has a decent size operation, but will have a negligible effect on DL's operation at PVG...despite your wishes otherwise.

https://en.wikipedia.org/wiki/Shanghai_ ... stinations

Sigh, what was this like 10 posts before this became a DTW thread :/

I could ask the same thing about this entire forum. Most threads related to DL go down this path

If CZ joined Oneworld (which I see likely), could they enter the trans-Siberian JV with AY, BA, JL and IB. At least I know that CZ is willing to form a JV with BA and I assume that AY is also willing to partner with a major Chinese airline like CZ (AY also has a codeshare agreement with Air China).

Will be blow for AF/KL as CZ is important longterm JV partner and allowed AFKL to be biggest European airline to China.

Lets see if they retain the JV outside of alliance membership.

A decent half-way house for CZ may be oneworld Connect membership. That would allow them to form deeper relationships with their sponsors (expected to be AA, BA and others) while limiting the impact on CX.

mercure1 wrote:

Will be blow for AF/KL as CZ is important longterm JV partner and allowed AFKL to be biggest European airline to China.

Lets see if they retain the JV outside of alliance membership.

No reason for the JV to end. If anything CZ should leave Skyteam and stay out of the alliance game. Just keep partnerships going with everyone. Leaving Skyteam lets CZ build up its new partnership with AA while retaining existing relationships (if desired). China Southern has a valuable network to offer to any partner. Restricting itself to an alliance seems like a silly move given that everyone wants partners in China. Its clear that DL is closer to MU so CZ had to make its own move. Good for them.

klakzky123 wrote:

mercure1 wrote:

Will be blow for AF/KL as CZ is important longterm JV partner and allowed AFKL to be biggest European airline to China.

Lets see if they retain the JV outside of alliance membership.

No reason for the JV to end. If anything CZ should leave Skyteam and stay out of the alliance game. Just keep partnerships going with everyone. Leaving Skyteam lets CZ build up its new partnership with AA while retaining existing relationships (if desired). China Southern has a valuable network to offer to any partner. Restricting itself to an alliance seems like a silly move given that everyone wants partners in China. Its clear that DL is closer to MU so CZ had to make its own move. Good for them.

I remember Skyteam requires member to limit the cooperation with non-ST airline.
after CZ leave ST, i doubt if AF is still able to cooperate with CZ.

The Alliances are more a thing of the past. Airlines have been forming JVs across Alliance lines. After leaving ST, CZ can form deeper relationship with AA. If AA wants to maintain its relationship with CX, AA can choose to focus its cooperation with CZ at PEK, and continue to use CX for southern China. I don't see AA wanting to fly to CAN and CZ's flights to US is not nearly as many as CX's for southern China connection. Without any alliance membership, CZ is free to maintain its relationship with AF and KL, which has been very successful.

CZ not in any alliances actually make everyone (AA, CX, AF and CZ itself) well balanced and all get what they want.

usssla wrote:

klakzky123 wrote:

mercure1 wrote:

Will be blow for AF/KL as CZ is important longterm JV partner and allowed AFKL to be biggest European airline to China.

Lets see if they retain the JV outside of alliance membership.

No reason for the JV to end. If anything CZ should leave Skyteam and stay out of the alliance game. Just keep partnerships going with everyone. Leaving Skyteam lets CZ build up its new partnership with AA while retaining existing relationships (if desired). China Southern has a valuable network to offer to any partner. Restricting itself to an alliance seems like a silly move given that everyone wants partners in China. Its clear that DL is closer to MU so CZ had to make its own move. Good for them.

I remember Skyteam requires member to limit the cooperation with non-ST airline.
after CZ leave ST, i doubt if AF is still able to cooperate with CZ.

The issue is with CZ. CZ has lots of non-alliance codeshares and they were the ones maxing out. That's why CZ is leaving. They couldn't fully codeshare with AA because they had maxed out non-Alliance codeshare routes. AF and KL on the other hand largely stick within the alliance (with a few exceptions) so having CZ's routes become part of the non-alliance pool probably won't be that big a deal. Also I believe the codeshare rules are largely tied to codeshares with airlines in another alliance (rather than non-aligned carriers). There's been some vagueness on this but that was my previous understanding (correct me if I'm wrong).

I think the existing JV will continue on and leaving Skyteam will allow CZ to codeshare across AA's network. I'm skeptical that CZ will enter OW with Cathay around to veto the deal.

The rumored CAN-DFW on CZ might be closer to happening then.

klakzky123 wrote:

mercure1 wrote:

Will be blow for AF/KL as CZ is important longterm JV partner and allowed AFKL to be biggest European airline to China.

Lets see if they retain the JV outside of alliance membership.

No reason for the JV to end. If anything CZ should leave Skyteam and stay out of the alliance game. Just keep partnerships going with everyone. Leaving Skyteam lets CZ build up its new partnership with AA while retaining existing relationships (if desired). China Southern has a valuable network to offer to any partner. Restricting itself to an alliance seems like a silly move given that everyone wants partners in China. Its clear that DL is closer to MU so CZ had to make its own move. Good for them.

OW is much more permissive about non-aliance partnerships. Don't forget QF has aull JV with EK and CX partners with a multitude of non-OW airlines.

klm617 wrote:

MIflyer12 wrote:

klm617 wrote:

It will be interesting to see what happens with MSP-PVG and ATL-PVG as I am sure both routes rely on feed from CZ at PVG.

Why? You don't think there's destination traffic to PVG?

No I think that both of these flights depend on onward connections at PVG. ATL-PVG has failed 2 times before this and I think that Delta was using onward PVG connections to make it viable. I think the O/D market is adequately covered over DTW and SEA by Delta.

For starters, yields to second cities in China are drastically lower than local yields often to the tune of -40% and minimum connect times across PVG are trash, so no DL is not depending on flow over China to support the flights. Even for the limited traffic that they are flowing over PVG, that's going to their equity partner MU, not CZ.

This announcement is not unexpected, but I'm reluctant to place my bets on CZ joining OW. Why would they? As has been stated a few times already in this thread, the alliance structure's utility is fading and will eventually be replaced by a joint venture structure supported by equity stakes not unlike what many ST carriers are well into already.

usssla wrote:

I remember Skyteam requires member to limit the cooperation with non-ST airline.
after CZ leave ST, i doubt if AF is still able to cooperate with CZ.

Not 100% sure but I think that limit may apply only to airlines in another alliance, not the non-aligned ones. Delta for example has large numbers of codeshares and even two JVs with airlines outside ST (GOL, Jet Airways, Virgin Atlantic and Virgin Australia) but still non-aligned.