American Airlines to Take $200 Million Stake in China Southern Airlines

American Airlines announced that it has committed to making a $200-million investment in China Southern Airlines, the largest of China’s three major state-owned carriers.

Although the deal only includes a 2.76% stake in the Chinese carrier, the investment, subject to regulatory approval, will open up the door to new codeshare routes and create other opportunities for the two airlines to work together, including in sales and airport facilities.

American’s and China Southern’s route networks are “highly complementary,” said Robert Isom, president of American Airlines, in a statement.

The two carriers are, however, in different airline alliances. American is a founding member of the Oneworld alliance while China Southern is part of SkyTeam, an alliance co-founded by American competitor Delta Air Lines.

American currently offers service to Beijing, Shanghai, and Hong Kong from its hub in Dallas, to Beijing and Shanghai from Chicago, and to Hong Kong and Shanghai from Los Angeles, while China Southern has its main hub in Guangzhou and offers a number of transpacific flights from the city.

American said that the two carriers will begin to offer codeshare flights and interline agreements later this year that will give American customers greater access to destinations in China and China Southern customers more destinations in North and South America. In addition, members of American’s AAdvantage frequent flyer program will be able to earn and redeem miles on China Southern flights in the near future.

(Photo: Accura Media Group)