China Southern has become a stepchild within the SkyTeam alliance, with Delta taking an equity stake in China Eastern and China Eastern taking an equity stake in Air France. Moreover with Delta’s Korean Air joint venture, China Southern Guangzhou connections become less important still.
American Airlines took an equity stake in China Southern (natch) but their codesharing relationship was limited by SkyTeam rules. And it’s been expected the carrier would leave SkyTeam. Indeed a Delta executive pretty much said so. It’s finally happening.
According to SkyTeam,
China Southern Airlines has decided not to renew its contract with SkyTeam, the global airline alliance, as of 1 January 2019.
China Southern’s decision reflects its strategic development, the changing trends of the global aviation industry and the evolution of alliances.
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.
There won’t be much impact on customers over the next year. At some point, to be announced, customers traveling on China Southern will no longer receive SkyTeam elite benefits or be able to credit miles to SkyTeam partners. And award tickets issued with miles from SkyTeam airlines will no longer be able to be changed.
Those relationships will be replaced with other airline relationships. Presumably there will be greater codesharing and a frequent flyer deal with American. Whereas Delta collects fuel surcharges on China Southern redemptions, I imagine that American Airlines will not. The ability to redeem on China Southern will be a win for AAdvantage members.
There are other potential chess moves. It’s been speculated that Cathay Pacific could decamp oneworld for Star, given reciprocal ownership stakes between Cathay and Star Alliance member Air China (and with oneworld member Qatar an owner of Cathay but threatening to up and leave oneworld itself). That would be an even bigger loss for AAdvantage members. I don’t have a feel for the likelihood of this move, though I did express skepticism about such a rumor a year ago.