American Airlines has no plans to raise stake in China Southern
February 5, 2019 Category China News Round-up, Weekly
American Airlines has ruled out making a larger investment in China Southern Airlines, saying it will maintain its holding unchanged at less than 3%, even as Qatar Airways recently bought a 5% stake in China’s biggest carrier by passengers. Doug Parker, Chief Executive of American Airlines, said: “No, we’re happy with our existing stake”, when asked by the South China Morning Post of the need to adjust its 2.76% stake in the Guangzhou-based carrier. Signaling his comfort with its Qatari counterpart being a co-shareholder in the same Chinese airline, Parker said he had “absolutely” no problem. He was speaking on the sidelines of a meeting in London of airlines of the Oneworld alliance.
Qatar Airways, fully owned by the Qatari government, said that it may increase its investment in China Southern before the end of the year. There have been tensions between American Airlines and Qatar Airways. American Airlines is among a group of U.S. carriers that believe Qatar Airways has unfair subsidies, which have enabled it to expand its fleet size and increase the number of flights serving U.S. cities. American Airlines, the largest airline in the world, paid USD200 million in March 2017 to acquire its stake in the Chinese carrier. The deal gives it a foothold in the world’s second largest air travel market, which some analysts believe may become the world’s biggest in the next decade. Under the deal, the two can code-share on flights between China and the U.S. American Airlines can also provide flight bookings on almost two dozen domestic Chinese routes.
The partnership is expected to strengthen when Beijing’s new Daxing Airport opens later this year. China Southern will be a tenant in the new facility, paving the way for expanded international flights out of Beijing.
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