I think its fairly safe to say the announcement stating they will codeshare on around 70 routes combined from PEK and PVG means either 1) its allowed within SkyTeam or 2) CZ is ok with whatever alliance cost is there.
Absolutely. AA and China Southern are both massive, sophisticated, multi-billion-dollar corporations with armies of financial and legal professionals. It simply defies logic and belief that these two companies would enter into such a "strategic relationship" - particularly one enabled and precipitated by a cash-for-equity transaction - and not both fully understand and appreciate whatever legal, regulatory or alliance-related contractual processes would have to be followed. That is to say - obviously AA and China Southern know the agreements China Southern has made with SkyTeam and/or bilaterally with other carriers, and still believe that this "strategic relationship," including the codesharing, will go forward.
Ultimately, it doesn't really matter what Delta or SkyTeam think. If China Southern and its new partial owner want to codeshare, and the relevant regulatory approvals are granted, it's going to happen.
AA doesnt need to be the largest, best, or most dominant to Asia or Oceania, but as a global carrier they do need to have a presence in key markets in the area. They are doing it in a rapid and organic way, and any loss making route will be given time to develop and be measured on its total value to the system not just irs individual performance.
So congrats to AA for getting the route it wanted, with good slots and a new partner to reduce its disadvantage in the region.
Exactly. United and Delta each spent hundreds of millions of dollars buying
a presence in Asia. AA is spending hundreds of millions of dollars building
a presence in Asia. In the end, AA is accomplishing precisely the tactical actions that are necessary to support the ultimate objective, which, again, is and always has been to have a credible, competitive and compelling transpacific offering for core U.S. customers. Once Delta has its JV in place, and depending on what happens with MNL and SIN, it seems entirely plausible to me that, net-net, AA and Delta are going to end up in largely the same place across the Pacific, with each having certain particular areas of strength but in general both having very strong networks and very strong partners, and both still being comfortably behind United in the region.
It's also the last logical piece of the puzzle in relation to AA's cornerstone strategy, (which I know is old strategy but still apparent in AA decision making), with DFW, ORD and LAX now fully connected into core Transpacific markets on both AA and Partners metal with extensive codeshares in place, or coming, to give further network reach.
Absolutely. And, needless to say, it isn't hard to see why AA has zeroed in on those three hubs as the gateways to East Asia - all three are very large demographic and economic centers that not only offer significant connectivity but also generate substantial O&D, and, regarding that connectivity, all three are also perfectly-positioned to compliment each other without much overlap (LAX for the West Coast, DFW for Texas and the South/Southeast, and ORD for the Upper Midwest and Northeast).
So although AA will probably never be UA or DL in Asia, the network they have now allows them to more effectively compete with them than in any time in the past. Now the challenge is to make it work and make it profitable given these building blocks because, ultimately, it's performance that counts.