American Airlines is buying an equity stake in China Southern Airlines, a move that will give its customers access to more destinations in Asia through code-sharing and frequent flyer connections.
The $200 million equity investment will give American a 2.68 percent stake in the Chinese carrier. American is following a strategy like that of Delta, which purchased 3.5 percent of China Eastern Airlines two years ago. Delta also owns more substantial equity stakes in Virgin Atlantic and Aeromexico.
“Later this year, the two carriers expect to begin codeshare and interline agreements that will give customers access to many more destinations in China, as well as North and South America,” American said. “The expected codeshare routes are anticipated to include the ability to earn and redeem AAdvantage Miles, through-bag checking and the ability to book travel on a single ticket. The planned routes operating under the interline agreement are anticipated to include through-bag checking to the traveler’s final destination.”
Most of China Southern’s transpacific flights are from Guangzhou. American flies to Beijing and Shanghai from Chicago, Dallas/Ft. Worth and Los Angeles. The company said that the new partnership with China Southern will give its customers access to 40 destinations through connections at Beijing and 30 beyond Shanghai. China Southern passengers will gain access to scores of AA cities beyond the Chinese carrier’s U.S. gateways of Los Angeles, San Francisco and New York JFK.
China Southern is Asia’s largest airline in terms of passenger traffic. Both China Southern and China Eastern are members of Delta’s global SkyTeam alliance, but a spokesperson for American tells TravelSkills that is not an issue in the equity purchase.
“We don’t expect China Southern to leave SkyTeam. That’s not the focus of our relationship with them,” the spokesperson said.
Meanwhile, American’s newest China route, from Los Angeles to Beijing, is still on hold as the carrier tries to negotiate slot assignments at Beijing from Chinese authorities. A few weeks ago, the U.S. Transportation Department gave American a six-month extension to start flying the route after it became apparent that the slot issue would not be worked out by the March 16 deadline originally set by the agency.
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