Qatar Airways Takes 5% Stake In China Southern

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Qatar Airways announced late Tuesday that they had purchased 5% stake in China Southern Airlines on December 28, 2018.

Qatar Airways China Southern

China Southern suddenly exited SkyTeam on January 1, 2019 giving the alliance only 45 day advance notice (read more here). It has been rumored that the airline would be joining Oneworld in due course.

Here’s the press release from Qatar Airways:

HONG KONG – Qatar Airways Group Q.C.S.C. (“Qatar Airways”) is pleased to announce that as part of its strategy to invest in the strongest airlines around the world and continue enhancing operations and network connectivity, on 28 December 2018, it has completed an on-market purchase of certain A shares and H shares of China Southern Airlines Company Limited (“China Southern Airlines”), resulting in our aggregate holding of approximately 5.00% of the total issued share capital of China Southern Airlines.

Qatar Airways’ Chairman His Excellency Mr Ali Shareef Al Emadi said, “Qatar Airways regards our shareholding in China Southern Airlines as an important part of our strategic investment in the largest airline in one of the world’s fastest growing aviation markets.”

Qatar Airways’ Group Chief Executive His Excellency Mr Akbar Al Baker added, “China Southern Airlines is one of the most prestigious airlines in the Chinese domestic market and an important market player in the world, with massive potential for cooperation in the future.  Given the complementary strengths and resources of each of China Southern Airlines and Qatar Airways, there are opportunities for us to work together and build a long term relationship in ways that would bring benefits to customers of both airlines. The investment is a clear demonstration of Qatar Airways’ continued commitment to connecting travellers across all corners of the world in a way that is meaningful and convenient.  Qatar Airways very much looks forward to the opportunity to deepen our working relationship with this great airline and further enhance the travel opportunities across the globe.”

This investment further supports Qatar Airways’ investment strategy which already includes its 20% investment in International Airlines Group, its 10% investment in LATAM Airlines Group, its 49% investment in Air Italy and its 9.99% investment in Cathay Pacific.

Conclusion

It is interesting to see how this Qatar Airways investment strategy will play out in the long-term. They will soon become the sponsoring airline of the Oneworld Alliance from which they have been threatening to leave.

Oneworld has been quiet if and when China Southern will become part of the alliance. The airline’s exit from the SkyTeam was abrupt.

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