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Airline industry braces for China Southern exit from Skyteam alliance, setting up clash with Cathay Pacific

Move out of club in favour of Oneworld by top mainland Chinese airline would have significant impact on Hong Kong’s flagship carrier

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China Southern is eyeing membership of Oneworld, which already includes Cathay Pacific. Photo: EPA

The airline industry is bracing for the mainland’s biggest carrier to pull out of one global alliance and join another in a move that could have a significant impact on Hong Kong’s Cathay Pacific group.

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“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.”

Delta is one of the founding airlines of the Skyteam alliance, which China Southern Airlines may pull out of after an internal review of the benefits and impact of a defection.

Most major carriers are signed up to one of three global airline clubs – Skyteam, Star Alliance and Oneworld – and in the two decades of their existence, it has been rare for an airline to leave, let alone defect to another.

With China Southern eyeing membership in Oneworld, which already includes Cathay Pacific and Cathay Dragon, Hong Kong’s flagship carrier could in turn move to Star Alliance. Remaining in Oneworld with China Southern would bring the two carriers’ home bases of Hong Kong and Guangzhou too close together, with destinations they serve overlapping and the airlines competing for the same pool of long-haul travellers.

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Joining Star Alliance, the same club as national carrier Air China, would bring Cathay Pacific closer to its second-biggest shareholder. Photo: Bloomberg
Joining Star Alliance, the same club as national carrier Air China, would bring Cathay Pacific closer to its second-biggest shareholder. Photo: Bloomberg
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