American Airlines has confirmed it will make a $US200 million equity investment in China Southern to forge an alliance between two giants of the aviation industry.

The deal between Guangzhou- based China Southern and American brings together two largely complementary networks and give American a foothold in the burgeoning Chinese market. 

Most of China Southern’s trans-Pacific flights originate in its Guangzhou hub while American serves Beijing and Shanghai from its hubs in Chicago, Dallas-Fort Worth and Los Angeles.

The two airlines expect to begin codeshare and interline agreements later this year that will give customers better access to each other’s markets.

 “China Southern’s extensive network within China touches developing and thriving markets that only a Chinese carrier can reach and they have a reputation and record of excellence,” American president Robert Isom said in a statement.

We are two of the biggest carriers in the world and our networks are highly complementary, with the potential to offer China Southern and American customers an unmatched range of destinations in two critical markets for business and leisure travelers.’’

China Southern chairman Wang Chang Shun predicted cooperation between the two airlines would create enormous benefits for the industry and customers around the world.

American said its customers would be able to access almost  40 destinations beyond Beijing and more than 30 destinations beyond Shanghai while China Southern customers would gain access to almost 80 destinations in North and South America.

“The expected codeshare routes are anticipated to include the ability to earn and redeem AAdvantage Miles, through-bag checking and the ability to book travel on a single ticket,’’ it said.

 “The planned routes operating under the interline agreement are anticipated to include through-bag checking to the traveler’s final destination.”

Other Chinese carriers already have minority overseas airline shareholders: Delta Air Lines has a stake in China Eastern and Hong Kong’s Cathay Pacific owns about 18 per cent of Air China.