Oneworld, the global airline alliance is in discussions about bringing China Southern Airlines Co. into its ranks, according to people familiar with the matter.

China Southern is the nation’s largest airline with dual hubs in the capital Beijing and the southern city of Guangzhou, where it is headquartered. Bringing it into the oneworld Alliance could provide other member airlines with valuable access in one of the worlds largest aviation markets, the people said, asking not to be identified because the details are private.

https://www.bloomberg.com/news/articles ... -its-ranks

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Makes sense. Prior to Covid, CZ was already leaning into its OW partnerships after having ditched Skyteam.

Timing makes sense. Looks like China is in the process of getting over zero-covid one way or another, so international flights will resume eventually.

Surprised that CX is okay with this.

Then again, CX is a bit of a shell of its former self.

BoatStuck wrote:

Surprised that CX is okay with this.

Then again, CX is a bit of a shell of its former self.

It seems to me like CX could use some politically powerful friends in the Chinese airline industry.

Why did it leave SkyTeam ? They seem to be having problems gaining and retaining partners while One World keeps growing lately.

How does this position oneworld vs Star Alliance and SkyTeam in the TPAC theatre. And how is that best measured?

From a US airline perspective, does this change the position of AA vs UA and DL in the TPAC theatre?

China Southern would be a great get for oneworld.

Add in some combination of Bamboo, Starlux, Bangkok Air, Gol, Rwandair (with the forthcoming Oman announcement)… really rounds out the alliance. Indigo as a OW Connect partner would be out there but also useful (albeit not a full service carrier) for many of us

questions wrote:

How does this position oneworld vs Star Alliance and SkyTeam in the TPAC theatre. And how is that best measured?

From a US airline perspective, does this change the position of AA vs UA and DL in the TPAC theatre?

AA and CZ already have a strategic partnership, which is why CZ left SkyTeam in the first place. CZ joining OneWorld would therefore have no impact on TPAC marketshare or the competitive dynamics between the US3, it would just solidify the status quo.

NameOmitted wrote:

BoatStuck wrote:

Surprised that CX is okay with this.

Then again, CX is a bit of a shell of its former self.

It seems to me like CX could use some politically powerful friends in the Chinese airline industry.

WIth Air China owning 30% of CX, it is possible that Cathay may, at some point, leave Oneworld and join its shareholder in Star. Asiana is soon to leave Star so the alliance would probably welcome another north Asian member.

tullamarine wrote:

NameOmitted wrote:

BoatStuck wrote:

Surprised that CX is okay with this.

Then again, CX is a bit of a shell of its former self.

It seems to me like CX could use some politically powerful friends in the Chinese airline industry.

WIth Air China owning 30% of CX, it is possible that Cathay may, at some point, leave Oneworld and join its shareholder in Star. Asiana is soon to leave Star so the alliance would probably welcome another north Asian member.

Is Hong Kong really "north Asia" though? I'm sure EVA Air would not welcome Cathay given the close proximity of Taipei. Not to even mention Singapore.

nbc7 wrote:

Why did it leave SkyTeam ? They seem to be having problems gaining and retaining partners while One World keeps growing lately.

CZ moving to oneworld isn't too much of a loss for SkyTeam (or perhaps the other way around?) considering that MF, an airline that is majority owned by CZ, is still a SkyTeam member. If anything, CZ will have its hands in two cookie jars instead of one, which would be unique among airlines aligned to a particular alliance.

Also, SkyTeam is gaining VS next year, so how are they losing members?

That may make sense. AA for the most part has been a colossal failure in Asia. I don't think they have ever made money on Shanghai or Beijing. Hong Kong never made money, and Tokyo barely hangs on. Their brief experiment to TPE was also a major failure. Do don't see AA ever returning to China or Hong Kong.

It does not surprise, since CZ left skyteam, there has been rumor, although CZ mention that they were considering to be not side with any alliance during that moment. But given that CZ has quite a number of codeshare partnership with some oneworld airlines, it has been speculated all the time

FLYFIRSTCLASS wrote:

That may make sense. AA for the most part has been a colossal failure in Asia. I don't think they have ever made money on Shanghai or Beijing. Hong Kong never made money, and Tokyo barely hangs on. Their brief experiment to TPE was also a major failure. Do don't see AA ever returning to China or Hong Kong.

AA flies to PVG via ICN right now, AA127. Currently in flight to ICN

FLYFIRSTCLASS wrote:

That may make sense. AA for the most part has been a colossal failure in Asia. I don't think they have ever made money on Shanghai or Beijing. Hong Kong never made money, and Tokyo barely hangs on. Their brief experiment to TPE was also a major failure. Do don't see AA ever returning to China or Hong Kong.

Then why were they flying the routes?

I have heard people familiar with the airline talk about how DL had lost interests in CZ due to their horrible service level and the difficulty to work with. For instance, there was even no flight interruption protection on an itinerary solely on CZ when the ticket was issued by a foreign airline and DL and their customers were probably fed up by it. For CZ's part, they were probably relieved as well after leaving SkyTeam without the extra work and hassle when customer service is not really what they are focused on. So I don't know why they would want to join another alliance especially under the current strict COVID Zero policy and the border closure. I guess oneworld could approach them for the sake of adding another member but I doubt CZ would have much appetite even in discussions under this COVID policy which has no end in sight.

Vicenza wrote:

FLYFIRSTCLASS wrote:

That may make sense. AA for the most part has been a colossal failure in Asia. I don't think they have ever made money on Shanghai or Beijing. Hong Kong never made money, and Tokyo barely hangs on. Their brief experiment to TPE was also a major failure. Do don't see AA ever returning to China or Hong Kong.

Then why were they flying the routes?

AA needed to serve major East Asian destinations such as PVG, PEK, HKG, NRT, and HND (at least prior to the COVID-19 pandemic) to remain relevant to AA's FF base in the United States.

NRT and HND are both hubs for AA's JV partner JL, and JL offers connections to other Asian destinations through NRT/HND.

xiaotung wrote:

I have heard people familiar with the airline talk about how DL had lost interests in CZ due to their horrible service level and the difficulty to work with.

Horrible service, they will fit right in with AA, it will be a match made in heaven.

nbc7 wrote:

Why did it leave SkyTeam ? They seem to be having problems gaining and retaining partners while One World keeps growing lately.

The prime reason for China Southern to leave SKYTEAM, was China Eastern's purchase of AF/KL shares (as did DL) and subsequent ever closer relationship between AF/KL/DL and MU.
Prior to this CZ had a very close relationship with AF/KL/DL.

Having both China Southern (Guangzhou) and China Eastern (Shanghai) in SKYTEAM was a perhaps an overkill.

As mentioned above the CA/CX cross-shareholding (both own shares in each other) and the reported CX veto rights (as a founding member) are I guess complicating factors.

Now obviously the China powers that be could instruct CA to sell its share to CZ, and I suspect Cathay could do with the $$s from selling it's CA shares.

But rarely is their smoke in China without a lot of negotiations already taking place.

jplatts wrote:

Vicenza wrote:

FLYFIRSTCLASS wrote:

That may make sense. AA for the most part has been a colossal failure in Asia. I don't think they have ever made money on Shanghai or Beijing. Hong Kong never made money, and Tokyo barely hangs on. Their brief experiment to TPE was also a major failure. Do don't see AA ever returning to China or Hong Kong.

Then why were they flying the routes?

AA needed to serve major East Asian destinations such as PVG, PEK, HKG, NRT, and HND (at least prior to the COVID-19 pandemic) to remain relevant to AA's FF base in the United States.

Yes, and unfortunately sounds about right to many US airlines these days in flying loss-making routes just for show. If flying at a loss then the FF base isn't really that relevant.

Founding member CX is the main point to this, whether they put up a and probably more importantly, whether CZ even wants to join.

I always get the vibe CX likes the kingpin status of being a founding member of the group, but they are a little 'whatever', take a back seat view to integration and use the alliance as much as it needs sort of vibe. I get the rest of OneWorld wanting this, given for a very long time there has been 'disappointment' over CX's weak domestic China network in terms of capacity/frequency, as HKG could/should be a great hub to build out the domestic China market from, but CX has always been more focussed on its very successful (in normal times) international network. It could be weirdly very difficult to connect into mainland China on other OneWorld metal through HKG, compared to PKX or PVG on Star or Skyteam respectively. Not helpful for the OneWorld alliance airlines. That said of course, CX doesn't want/need someone else in its back yard for its connecting traffic, not far away in the Pearl delta.

Given the Air China partnership, it's easy to make the argument that CX could jump to Star, further CX and LH have FF miles earning reciprocity on each other's metal, but then that all ignores the investment by QR in the group, and also the politics within the two alliances. OneWorld airlines may be frustrated at CX domestic China capacity (in pre-pandemic normal times), but CX is a founding member and will always be a kingpin within the group and has an exceptionally good service that brings traffic in from other members. It does well out of its OneWorld membership. Star on the other hand has become the dictatorship of LH & UA politically with the rest there just to make up the numbers. Even SQ has started to look outside the group given its reduced political influence. LH are soon to reduce the FF credit given travelling on Star members. That's not the case in OW which as an alliance is a lot fairer and just with reciprocal benefits. Why a 'major' airline would join Star Alliance now is beyond me.

Similarly, sure CZ might like the extra traffic, but as others have said above, is it really ready and willing to make the investments required to integrate itself in the group? They have never really said they are, preferring the more JV angle, which they already have with some airlines, and thus what is their upside joining OW?

It's a bit of a complex picture with the cross shareholdings and JVs going different ways, differing opinions about what an alliance should entail, and that would support the current status quo.

dfdubflyer wrote:

China Southern would be a great get for oneworld.

Add in some combination of Bamboo, Starlux, Bangkok Air, Gol, Rwandair (with the forthcoming Oman announcement)… really rounds out the alliance. Indigo as a OW Connect partner would be out there but also useful (albeit not a full service carrier) for many of us

And don't forget Philippine Airlines(PR) as a perfect fit in Oneworld - if joined it will have 2 Southeast Asia carriers each alliance(besides MH), Skyteam has Garuda(GA) and Vietnam Airlines(VN) and Star as Singapore Airlines(SQ) and Thai Airways(TG).

eurotrader85 wrote:

Founding member CX is the main point to this, whether they put up a and probably more importantly, whether CZ even wants to join.

I always get the vibe CX likes the kingpin status of being a founding member of the group, but they are a little 'whatever', take a back seat view to integration and use the alliance as much as it needs sort of vibe. I get the rest of OneWorld wanting this, given for a very long time there has been 'disappointment' over CX's weak domestic China network in terms of capacity/frequency, as HKG could/should be a great hub to build out the domestic China market from, but CX has always been more focussed on its very successful (in normal times) international network. It could be weirdly very difficult to connect into mainland China on other OneWorld metal through HKG, compared to PKX or PVG on Star or Skyteam respectively. Not helpful for the OneWorld alliance airlines. That said of course, CX doesn't want/need someone else in its back yard for its connecting traffic, not far away in the Pearl delta.

Given the Air China partnership, it's easy to make the argument that CX could jump to Star, further CX and LH have FF miles earning reciprocity on each other's metal, but then that all ignores the investment by QR in the group, and also the politics within the two alliances. OneWorld airlines may be frustrated at CX domestic China capacity (in pre-pandemic normal times), but CX is a founding member and will always be a kingpin within the group and has an exceptionally good service that brings traffic in from other members. It does well out of its OneWorld membership. Star on the other hand has become the dictatorship of LH & UA politically with the rest there just to make up the numbers. Even SQ has started to look outside the group given its reduced political influence. LH are soon to reduce the FF credit given travelling on Star members. That's not the case in OW which as an alliance is a lot fairer and just with reciprocal benefits. Why a 'major' airline would join Star Alliance now is beyond me.

Similarly, sure CZ might like the extra traffic, but as others have said above, is it really ready and willing to make the investments required to integrate itself in the group? They have never really said they are, preferring the more JV angle, which they already have with some airlines, and thus what is their upside joining OW?

It's a bit of a complex picture with the cross shareholdings and JVs going different ways, differing opinions about what an alliance should entail, and that would support the current status quo.

CZ has been leaning towards some One World carriers for some time. And CX and CZ being in the same alliance doesn't really constitute a functional alliance in the traditional sense does it? CX works closely with some Star Alliance carriers already - e.g. NZ; AC; However, the notion that CZ would push a founding member of One World Alliance out... hmmm; I don't see it gaining traction unless CX decides to make a move for more strategic reasons. This isn't impossible. However, my sense is that airlines like CX and NZ are at a point where they are reviewing constraints on their freedom to enter into agreements with other carriers. I would also argue that the era of alliances in the way we have come to think about them may be over; airlines are transcending these boundaries and forging their own connections regardless. So perhaps, it doesn't matter so much any more what alliance you affiliate with at present; options are on the table and these may be more fluid going forward much like partners are in other non-airline loyalty programmes.

eurotrader85 wrote:

LH are soon to reduce the FF credit given travelling on Star members. That's not the case in OW which as an alliance is a lot fairer and just with reciprocal benefits.

Until you meet QF.

The way I see alliances nowadays is that they are more of a marketing tool than revenue generating as they were originally intended. More airlines have come to accept this even when alliances don't bring them too many direct financial benefits as a carrier as they might find it difficult to cater to customers who perceive non-aligned carriers less attractive especially in the loyalty arena which are increasingly more profitable than the airlines themselves. Being in an alliance is important not to the airlines per se (you have your JV's for that) but to their loyalty programs.

xiaotung wrote:

eurotrader85 wrote:

LH are soon to reduce the FF credit given travelling on Star members. That's not the case in OW which as an alliance is a lot fairer and just with reciprocal benefits.

Until you meet QF.

The way I see alliances nowadays is that they are more of a marketing tool than revenue generating as they were originally intended. More airlines have come to accept this even when alliances don't bring them too many direct financial benefits as a carrier as they might find it difficult to cater to customers who perceive non-aligned carriers less attractive especially in the loyalty arena which are increasingly more profitable than the airlines themselves. Being in an alliance is important not to the airlines per se (you have your JV's for that) but to their loyalty programs.

...and to add further credit to your QF analogy, I've seen aviation bloggers opine that Virgin Australia's lack of alliance (and/or reciprocal benefits) made them less desirable for travel (in some cases even where they were less expensive, and perhaps just as convenient) and especially for connecting travel (and onto partners, where QF has OneWorld members to catch up, apart from the strong QF brand/services already). Despite JVs and other forms of partnership, I wonder how an alliance membership could/would have shaped Virgin Australia's future (and, that's past saying which alliance they would have been invited/accepted entry to).

Backing to QF, I do wonder how/where QF will partner with CZ in the future. As is, where are places for success, for both? How would synergies and/or strategies help both, in future? Would/could QF maintain their current persona/relationship with alliance members, and transfer that to CZ, or, are there places/avenues/opportunities for them to forge a more enhanced relationship?

Backing to QF, I do wonder how/where QF will partner with CZ in the future. As is, where are places for success, for both? How would synergies and/or strategies help both, in future? Would/could QF maintain their current persona/relationship with alliance members, and transfer that to CZ, or, are there places/avenues/opportunities for them to forge a more enhanced relationship?

Qantas has already chosen China Eastern as their Chinese partner. Who knows if they would ditch them for China Southern were the latter to join Oneworld but, using the EK precedent when QR joined Oneworld, you'd think they'd do nothing.

tullamarine wrote:

Qantas has already chosen China Eastern as their Chinese partner. Who knows if they would ditch them for China Southern were the latter to join Oneworld but, using the EK precedent when QR joined Oneworld, you'd think they'd do nothing.

True, but QF has had a codeshare relationship with CZ since 2014, even with the MU alliance. Reality is that for close to three years there has been a very minimal network between Australia and China operating, so it could be argued that there is something of a reset across all three carriers anyway.

FLYFIRSTCLASS wrote:

Their brief experiment to TPE was also a major failure.

What data do you have to back this up, or is it just made up?

I heard the loads on AA SJC-TPE were pretty good. One of my co-workers flew it once and said it was full. Another time it was sold out in Business Class, so he had to go through NRT.

Do you recall a certain event that happened right during the short life of this route?

Vicenza wrote:

jplatts wrote:

Vicenza wrote:

Then why were they flying the routes?

AA needed to serve major East Asian destinations such as PVG, PEK, HKG, NRT, and HND (at least prior to the COVID-19 pandemic) to remain relevant to AA's FF base in the United States.

Yes, and unfortunately sounds about right to many US airlines these days in flying loss-making routes just for show. If flying at a loss then the FF base isn't really that relevant.

What? Publicly-traded airlines are in the business of show. If they’re flying a loss-making route it’s because that route plays a role in the larger network, probably due to corporate contracts. Or, the airline is making an strategic investment in what it believes will be a profitable route. Businesses just aren’t as simple as “only fly routes that make money.”

dfdubflyer wrote:

China Southern would be a great get for oneworld.

Add in some combination of Bamboo, Starlux, Bangkok Air, Gol, Rwandair (with the forthcoming Oman announcement)… really rounds out the alliance. Indigo as a OW Connect partner would be out there but also useful (albeit not a full service carrier) for many of us

Oneworld is lacking in eastern Europe after Malev's demise. People from Australia/Asia don't like back tracking through MAD/LHR.

tullamarine wrote:

Qantas has already chosen China Eastern as their Chinese partner.

This is QF we are talking about... EY was their ME partner, then they dropped them for EK and a few years later QR joined Oneworld. What 'is' today doesn't mean it will be in the future.

anstar wrote:

tullamarine wrote:

Qantas has already chosen China Eastern as their Chinese partner.

This is QF we are talking about... EY was their ME partner, then they dropped them for EK and a few years later QR joined Oneworld. What 'is' today doesn't mean it will be in the future.

Yes QR joined Oneworld but QF basically ignored them and EK remains very much their preferred Middle East partner.

I do remember that sometime before the pandemic, British Airways and China Southern formed a joint venture in early 2020, and should China Southern join Oneworld, I could see British Airways launch flights to Guangzhou in China's post-pandemic recovery, but will be years off; let's see what happens next though.

Philippine333 wrote:

I do remember that sometime before the pandemic, British Airways and China Southern formed a joint venture in early 2020, and should China Southern join Oneworld, I could see British Airways launch flights to Guangzhou in China's post-pandemic recovery, but will be years off; let's see what happens next though.

BA will not offer flight to Guangzhou. They will offer enhanced codeshare on CZ metal. Guangzhou does not fit in with BA's route strategy.

BA moved its PEK flight to PKX where CZ moved to in order to utilise the new hub and offer more connections via CZ. Lots of flights to interior of China was offered on BA website under the agreement. The idea in that time was for BA to use PKX as a connection hub working with CZ to offer more Chinese cities to BA's network. So BA already chose PKX over CAN. That was before Covid however, and then suddenly Russian airspace closed for BA.

At this moment the only way BA would fly to Guangzhou would be somehow China offers BA an exemption to fly London-Guangzhou-Beijing without local traffic right should BA is unable to access Russian airspace for a long period of time in near future.

anstar wrote:

tullamarine wrote:

Qantas has already chosen China Eastern as their Chinese partner.

This is QF we are talking about... EY was their ME partner, then they dropped them for EK and a few years later QR joined Oneworld. What 'is' today doesn't mean it will be in the future.

Qantas also had a JV with CZ before/overlapping with CZ before MU not sure what happened, never went anywhere.

QR also partner with Virgin Australia over QF as the QF/QR CEO hate each other….

smi0006 wrote:

QR also partner with Virgin Australia over QF as the QF/QR CEO hate each other….

It is actually more than that. QF/EK agreement was very comprehensive. Should QF and QR cooperate under the alliance mode, QF/EK agreement would never pass ACCC scrutiny. I don't think there is any public record for personal dislikes between the CEOs (I don't mean they don't hate each other, just not public record for it) . There are exchanges of opinions on each airlines and largely professional.

If we dial back in time, QR was in bed with US Airways and was known for intentions joining star alliances. Then what happened was US Airways and AA merged, then QR joined oneworld afterwards. Before QR joining oneworld QF was in talk with Emirates.

If QR had be in bed with QF before QF conclude the agreement with EK, the QF EK alliance would never pass ACCC scrutiny. Hence it is understandable QF chose to distance themselves from QR, UL and MH, the three airlines that joined oneworld after QFEK alliance which all have European Australian route network. After all, QFEK alliance is Alan Joyce's major achievement for being the QF CEO in that time. It was not like QR hated QF, or QR CEO hated QF CEO, it was just at that time, QF had its own ideas on who they would like to be together with. And unfortunately all three new oneworld recruitment (QR, MH and UL) in that time had to be ignored by QF in order to pass ACCC and other market competitive tests by Australian government.

Now QR join force with Virgin Australia is actually a helping hand for QF, because at some stage the QFEK alliance will be reviewed and further market competitive research is needed when the agreement comes to next renewal. QR coorporate with Virgin Australia is what QF needed to show prove that being in oneworld while cooperate with EK does not hurt competition. And it actually increase competition and its smaller rival like Virgin Australia gets boost from competition even cone from within oneworld alliance.

However, I don't know if EK is really interested in renewing the QFEK alliance when time is due. EK itself is big enough to play alone without QF. Should QFEK alliance broke due to EK move closer to AC and UA then eventually star alliance, it may force QF and QR start to normalise their relationship.