American Airlines is reported to be weighing up taking a stake in China Southern Airlines.
Asia’s biggest carrier confirmed that negotiations are taking place over “a possible major strategic co-operation with American Airlines, involving, among others, proposed issue of shares of the company and other business co-operation”.
The US carrier is expected to invest around $200 million China Southern’s Hong Kong-listed shares through a private placement, Bloomberg reported.
If concluded, the deal would strengthen American’s presence in the Chinese market after rival Delta Air Lines acquired minority stake in China Eastern Airlines in 2015.
Guangzhou-based China Southern would be the last of the nation’s top three airlines to bring in a non-mainland Chinese strategic investor.
Cathay Pacific Airways owns about 18% of flag carrier Air China.
China Southern, which indicated in January that it was considering bringing in strategic investors, has been adding routes to Australia, New Zealand and countries in Southeast Asia as it competes with China Eastern and Air China.
Former American Airlines chairman, Robert Crandall, told Bloomberg Television: “All big US carriers will be making deals of one kind or another with major airlines all over Asia and certainly within China.
“These things are going to grow and because of the network nature of the airline industry, everybody is going to play and everybody needs to play.”
This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.