SkyTeam, Star Alliance Further China Efforts

The SkyTeam and Star alliances this summer gained footholds in the booming China travel market by further integrating China-based carriers. Air China and Shanghai Airlines recently announced intentions to join Star Alliance, while China Southern—the country's largest carrier—formalized its agreement to move forward with SkyTeam integration, after signing an initial agreement two years ago.

Star Alliance CEO Jaan Albrecht said that the alliance sought two carriers due to the large size of the Chinese market and to give it a dual-hub approach, which allows Star "to offer a unique network from the two most important airports" in China: Beijing and Shanghai.

Shanghai Airlines and Star Alliance also said they would work together "to obtain more resources from airport authorities for the mutual benefit of all parties."

Shanghai Airlines chairman Zhou Chi said, "With the development of Shanghai Pudong Airport, we should make full use of the airport resources, provide quick and convenient transferring and connecting service and offer high-quality service to business passengers. This is also the main character of Star Alliance. We hope that the establishment of the second terminal building in the near future will provide high-standard, high-quality and high-efficiency operating service, thus greatly supporting Star Alliance."

Star Alliance said the addition of Air China and Shanghai Airlines next year will grow the alliance network to 20 members, "offering more than 16,500 daily fights to 912 destinations in 160 countries."

SkyTeam also said its partnership with China Southern gives the alliance a well-positioned hub in China.

"As the largest airline in the People's Republic of China, China Southern's addition to SkyTeam will expand the alliance's service in key regions, while adding a well-positioned, modern hub in Guangzhou airport to the alliance's hub network," SkyTeam member Delta Air Lines said in a statement.

SkyTeam in 2004 announced it had signed an agreement with China Southern, representing the preliminary steps toward full membership, which it expects to complete next year. SkyTeam said China Southern must first share codes bilaterally and integrate frequent flyer programs and airport lounge agreements with each SkyTeam carrier, among other membership requirements.