China Southern is quitting the SkyTeam alliance, in a move which robs the alliance of its largest Chinese partner and is sure to encourage rumours that the Guangzhou-based airline could join Oneworld.
A media statement issued by SkyTeam said "China Southern’s decision reflects its strategic development, the changing trends of the global aviation industry and the evolution of alliances."
"China Southern has decided not to renew its contract with SkyTeam, the global airline alliance, as of 1 January 2019," the alliance said.
"SkyTeam and China Southern have agreed to work closely together to ensure a seamless transition for all customers and partners. That process will run throughout 2019 and will complete by the year-end."
This process will include managing the impact of earning and using frequent flyer miles and airport lounge access.
China Southern said in a statement that it will seek partners outside of the alliance to build up a global network.
SkyTeam's remaining airlines in mainland China are Shanghai-based China Eastern and ther smaller Xiamen Airlines; the alliance also counts Taiwan's China Airlines as a member.
Beijing-based Air China belongs to the Star Alliance and has a stake in Cathay Pacific, a Oneworld member.
China Southern joined SkyTeam in 2007 and has direct flights to its Guangzhou hub from Sydney, Melbourne, Brisbane, Adelaide and Perth. In addition to bringing business travellers into the heart of China's Pearl River Delta manufacturing region, the airline also offers onwards connections across Europe and the UK.
In the past two years, China Southern has increasingly branched out to non-SkyTeam members for partnerships. In addition to the minority stake sold to American Air, it’s in talks to upgrade its code-share agreement with British Airways into a joint venture. Both BA and American are members of the Oneworld family.
Meanwhile, domestic rival China Eastern has been seeking closer ties with other SkyTeam members including Delta Air Lines and Air France/KLM through mutual stake investments, leaving China Southern in an awkward situation within the alliance.
Additional material by Bloomberg