Delta owns a stake in China Eastern, the country’s most subsidized airline giving them a presence in Shanghai especially. They’ve become even more linked, with Delta and China Eastern buying into and taking a board seat with Air France KLM along with Air France KLM taking an ownership stake in 49% Delta-owned Virgin Atlantic.
China Southern based out of Guangzhou has been left as something of a redheaded stepchild in Delta and Air France-driven SkyTeam. And American has gone ahead and invested $200 million in China Southern, giving them their own foothold into mainland China.
The South China Morning Post says China Southern is on the verge of leaving SkyTeam and quotes Delta more or less telling them to kiss off.
“I think we have to accept the reality,” Delta Air Lines’ Greater China chief, Wong Hong, said. “It is more for them to think through and decide.”
…“Until such time … [the move] is a decision China Southern may make at some point in the future. Today, officially, they are with us and they are no different to any other Skyteam partner.”
“Today” and “officially” as in de jure if barely de facto China Southern is a member of SkyTeam, of course we know that much already, it’s on the SkyTeam website and Delta isn’t even trying to sell them on staying they’re just saying they’ve ‘accept[ed] the realty’ of the airline’s departure and entirely up to them ‘to think through and decide’.
The piece’s author suggests this sets up a conflict with Cathay Pacific, in whom Star Alliance member Air China has a large stake, given the proximity of Chinese hubs should China Southern bolt for oneworld with American Airlines. American has never managed to bring Cathay into its transpacific joint venture with JAL, leaving them only loosely linked (although they have a new large investor in oneworld member Qatar, themselves on the outs with American).
Delta of course not only has its investment in China Eastern but a pending joint venture across the Pacific with Korean Air as well, reducing the need for Guangzhou connections.
I’m not sure that Cathay so obviously bolts for Star, though, which does feature Shenzhen Airlines based a mere 24 miles from Hong Kong (which has more planes than Cathay Pacific does on its own, though narrowbodies, and which has a codeshare relationship with Cathay Dragon) along with Air China, Thai Airways, Singapore Airlines, ANA, and Asiana so the Star field in Asia is already crowded.
The Morning Post points out that Cathay’s “business ties are stronger with Star members Lufthansa, Air China and New Zealand’s national airline.”
Could this happen? Certainly. Is it imminent? It seems less likely than China Southern’s departure from SkyTeam.
This would be a huge blow to the value of American AAdvantage miles, though award space on Cathay is far scarcer than it used to be. And it would be a huge blow to oneworld elite status, since The Pier and The Wing first class lounges in Hong Kong are accessible to oneworld member top tier elites regardless of class of service flown on a oneworld airline same day. Star Alliance rules do not similarly provide for first class lounge access.
(HT: One Mile at a Time)