Qatar takes stake in China Southern in latest global play

January 03, 2019
Qatar China SOuthern stake
Photo: Qatar

Qatar Airways has taken a 5 percent stake in Guangzhou-based China Southern as it seeks a foothold in the fast-growing Chinese market and pursues its strategy of investing in key airlines around the world.

The Doha-based carrier announced Wednesday it had completed an on-market purchase of certain A shares and H shares of China Southern to achieve its 5 percent stake of the company’s total issued capital.

Oneworld member Qatar also has a 9.99 percent stake in Hong Kong-based Cathay Pacific as well as a 20 percent stake in International Airlines Group, a 10 percent investment in LATAM Airlines Group and a 49 percent stake in Air Italy.

Its latest purchase comes as China Southern is taking a new direction and left the  SkyTeam alliance on January 1.

READ SkyTeam reassures customers over China Southern departure.

Qatar chairman Ali Shareef Al Emadi said in a short statement that company regarded its shareholding in China Southern “as an important part of our strategic investment in one of the world’s fastest-growing aviation markets”.

Qatar chief executive Akbar Al Baker described China Southern as one of the most prestigious airlines in the Chinese domestic market and an important world player “with massive potential for co-operation 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,’’ he said.

“The investment is a clear demonstration of Qatar Airways’ continued commitment to connecting travelers 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.”

Fellow oneworld member American Airlines also invested in China Southern with a $US200 million deal for a 2.76 percent take.

The Chinese carrier and American announced in November 2018 they were taking steps to strengthen their partnership with a significant expansion of codeshare cooperation and the launch of reciprocal frequent flyer benefits and lounge access.

Qatar abandoned attempts to invest in American after it received a hostile reception from the US Carrier and relations have continued to be been tense.

Al Baker warned in November that American and Qantas could drive the Gulf carrier out of oneworld and that it could form its own alliance with its equity partners.

READ Qatar chief threatens to leave oneworld

He accused American of disloyalty to a fellow alliance partner and Qantas of “slandering” moves by Qatar to increase its presence in Australia.