China Southern Airlines has secured its 50th corporate account
and anticipates accelerated growth through a new airport and increased
cooperation with new investor American Airlines.
Revenue from business travel grew 20 percent in 2016 to $1.2
billion, and it increased 27 percent year over year in the first half of this
year, said SVP of sales Li Dongliang.
The airline also added routes this year, including:
- Guangzhou-Mexico City began April 10
- Shenzhen-Melbourne began June 1
- Shenzhen-Moscow is set for September
- Guangzhou-Cairns is set for December
It also will increase its service between Guangzhou and
London this year, Dongliang said.
China Southern will gain a particularly significant
opportunity, however, when Beijing's new airport opens in 2019, he said. Of its
capacity of 100 million passengers per year, 40 percent will be allotted to
China Southern. That gives the airline the chance to chip away at Air China's
dominance in Beijing.
In the meantime, China Southern is awaiting the closure of
American Airlines' $200
million investment for a 2.8 percent stake in the carrier. American
Airlines EVP of corporate affairs Stephen Johnson said on an earnings call in
late July that American is "waiting for some final government approvals
related to the slot exchange" but expected the deal to close in August.
The China Southern and American Airlines sales teams already
have met to discuss collaboration opportunities, Dongliang said.
Although its budding relationship with American Airlines crosses
China Southern's major alliance in SkyTeam, Dongliang said the carrier is
pursuing a relationship with American Airlines within the boundaries of SkyTeam
regulations. SkyTeam founder Delta, meanwhile, has
invested in fellow SkyTeam member China Eastern, which in turn is acquiring
a
10 percent stake in Delta partner Air France-KLM.
The
transpacific market remains ripe for crossborder consolidation, as 55 percent
of seats are in an antitrust-immunized alliance, according to Samuel Engel,
leader of ICF's aviation group. For transatlantic capacity, by comparison, more
than 80 percent of seats are locked into one or more immunized joint ventures,
he said.