Qatar Airways bought a 5% stake in China Southern Airlines, both companies announced on January 2 on a deal concluded on December 28, 2018. Qatar bought on-market A and H shares of China Southern Airlines Company Limited (CSACL) for an undisclosed amount.
Qatar chairman Akbar al-Baker describes the purchase as “an important part of our strategic investment in the largest airline in one of the world’s fastest-growing aviation markets”, adding there is “massive potential” for cooperation in the future. Al Baker says Qatar is in here for a longterm partnership, describing China Southern as a strong domestic airline and an important world market player.
Guangzhou based China Southern has a fleet of 800+ aircraft, while Qatar’s fleet has 200+. Both airlines are or already have revised their partnership strategies. China Southern left Skyteam on January 1, while teaming up with oneworld partner Finnair in a codeshare agreement from April 22, 2019.
Al Baker has said at multiple occasions recently that Qatar will leave oneworld, dissatisfied with the critical stance from American Airlines.
It’s most interesting that Qatar buying into China Southern makes it a joint shareholder of the airline with American, which bought a 2.68% share in CS in 2017. The same year that American Airlines’s board and shareholders obstructed to Qatar taking a 4.75% share in the US airline.
Until recently China Southern’s other shareholders have been China Southern Air Holding Company, HKSCC Nominees Ltd, CSAHC holding company Nan Lung Holding, China Securities Finance Corporation Ltd, National Security Fund 118, Central Huijin Investment, Zhong Hang Xin Gang Guarantee Co, China Merchants Securities, and China National Aviation Holding Company.
The CS agreement gives Qatar Airways a stronger hold on the Chinese market, in which it already has a share through 9.99% ownership of (oneworld partner) Cathay Pacific. Qatar owns 20% of International Airlines Group (IAG), 10% in LATAM Airlines Group (also a oneworld partner) and 49% in Air Italy.