British Airways and China Southern Airlines Launch Joint Venture
Dec 19, 2019, 2:34 am
#31
Join Date: Jan 2010
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Dec 19, 2019, 3:05 am
#32
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CO left Skyteam because they entered their partnership with UA with a clear view to merge even though they couldn't say so at the time so served the "DL is being mean to us and ST prefers them" rubbish. It was not about marginalisation, but about consolidation and as you rightly point out ownership. As you say, the current LA-DL and VS-DL ownership models are also good examples (but with less hypocrisy as this was not about consolidation within the US domestic market).
Like moondog, I am personally not convinced by the "CX moves to *A, CZ moves to OW" argument, and frankly, this would be a pretty problematic situation for OW. In a nutshell, mainland China airlines are not there to be nice to others - alliances or otherwise and have been frequently awkward partners elsewhere." You ask about how people can be sure and of course they can't be, anything can happen, anyone can buy (almost) anyone else, or just collapse or restructure, or join or leave an alliance, but personally I do not see any sign of those changes (nor the claimed one about SQ moving on from *A).
Like moondog, I am personally not convinced by the "CX moves to *A, CZ moves to OW" argument, and frankly, this would be a pretty problematic situation for OW. In a nutshell, mainland China airlines are not there to be nice to others - alliances or otherwise and have been frequently awkward partners elsewhere." You ask about how people can be sure and of course they can't be, anything can happen, anyone can buy (almost) anyone else, or just collapse or restructure, or join or leave an alliance, but personally I do not see any sign of those changes (nor the claimed one about SQ moving on from *A).
Dec 19, 2019, 3:47 am
#33
Join Date: May 2014
Posts: 7,236
From an airline point of view, besides simple codeshares, CX has always refused to take part in JVs - they have one with Air New Zealand, one with Lufthansa for Cargo and one with Air China still for freight, but not with major oneworld carriers as far as I know. Also, their cooperation on non-commercial aspects is very much, shall we say, limited. I've worked on both passenger/baggage handling and line engineering: for the first, especially at hubs, there's usually a strong support between oneworld carriers: the local airport managers know each other, try to work together (as much as they can depending on constraints) and there's always a push to have joint decisions or a show a common front when dealing with the airport authorities. CX, doesn't. I don't think I've ever seen CX at the LHR meetings we had, whilst AA was always there and even QF made appearances. Similarly, on the Engineering front, whilst most airlines agree to pool resources and are happy to lend a hand in times of need - often for free! - CX never seemed to do it at HKG. Parts of it is undoubtedly due to having HAECO and it not being an airline, but still. The impression I always had was that, of the big players in oneworld, QR was the disruptive brat and CX the unintersted cousin.
Dec 19, 2019, 3:57 am
#34
Join Date: Aug 2013
Location: London
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The cost of joining or jumping alliance is in the hundreds of millions of pounds, that is an expense that very few carriers could stomach, particularly at a time when the benefits and strengths of being in an alliance are being questioned. One expects to see carriers strike more bilateral deals and agreements a la CZ and BA, agnostic of alliance party lines. As FFs let's just hope that the concept of alliances is around at all in 10 years time and still offers us status recognition and associated benefits.
Dec 19, 2019, 4:15 am
#35
Join Date: Jan 2010
Posts: 7,464
From an airline point of view, besides simple codeshares, CX has always refused to take part in JVs - they have one with Air New Zealand, one with Lufthansa for Cargo and one with Air China still for freight, but not with major oneworld carriers as far as I know. Also, their cooperation on non-commercial aspects is very much, shall we say, limited. I've worked on both passenger/baggage handling and line engineering: for the first, especially at hubs, there's usually a strong support between oneworld carriers: the local airport managers know each other, try to work together (as much as they can depending on constraints) and there's always a push to have joint decisions or a show a common front when dealing with the airport authorities. CX, doesn't. I don't think I've ever seen CX at the LHR meetings we had, whilst AA was always there and even QF made appearances. Similarly, on the Engineering front, whilst most airlines agree to pool resources and are happy to lend a hand in times of need - often for free! - CX never seemed to do it at HKG. Parts of it is undoubtedly due to having HAECO and it not being an airline, but still. The impression I always had was that, of the big players in oneworld, QR was the disruptive brat and CX the unintersted cousin.
Dec 19, 2019, 4:38 am
#36
Join Date: May 2014
Posts: 7,236
It mightn't be immediately visible, but as a passenger, if CX were part of a JV, you'd see more product availability and more choice, on more route. If there was more coordination, easier bag transfers (the bag short-shipment rate at LHR, since when AA and BA have started working together actively, has dropped by a lot. Can't say how much, but double % figures). And in the unlucky event of a technical issue, a hopefully speedier solution.
Dec 19, 2019, 4:42 am
#37
Join Date: Jan 2010
Posts: 7,464
It mightn't be immediately visible, but as a passenger, if CX were part of a JV, you'd see more product availability and more choice, on more route. If there was more coordination, easier bag transfers (the bag short-shipment rate at LHR, since when AA and BA have started working together actively, has dropped by a lot. Can't say how much, but double % figures). And in the unlucky event of a technical issue, a hopefully speedier solution.
I already have a multitude of route options, and I am not linked only to OW - I am hugely invested in *A also.
And I don't check luggage
Dec 19, 2019, 8:34 am
#38
Join Date: Apr 2008
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In the pasr CX benefitted a lot from OW. It was an airline of choice for European (BA FFP) and American (AA FFP) travelling to China and Asia. With the agreements of BA and AA with CZ that role will diminish.
Nowadays extensive reciprocal agreements and JV become more important than alliances. CX blocking CZ entry into OW just leads to ill will from BA, Aa and QR and leads to those more-important agreements.
And i don't see the case for CX jointing ST or *A.
And with a small FFP member base, CX is in no position to have a big voice at OW. CX was a top-quality airline, but with the improved quality of AA and CZ products, it is not a major argument anymore.
In summary, i would expect that joining OW would be good for CZ brand image but the agreements with BA and AA are a good business shortcut. And BA will feed Chinese traffic into its European network, as well as attracting more European pax into China thanks to the feeder optons on CZ. .
Nowadays extensive reciprocal agreements and JV become more important than alliances. CX blocking CZ entry into OW just leads to ill will from BA, Aa and QR and leads to those more-important agreements.
And i don't see the case for CX jointing ST or *A.
And with a small FFP member base, CX is in no position to have a big voice at OW. CX was a top-quality airline, but with the improved quality of AA and CZ products, it is not a major argument anymore.
In summary, i would expect that joining OW would be good for CZ brand image but the agreements with BA and AA are a good business shortcut. And BA will feed Chinese traffic into its European network, as well as attracting more European pax into China thanks to the feeder optons on CZ. .
As you can see - AY fits to be a good Asia - Europe hub operator. So is KL and LH. London is too far and too much trouble to transit in for a Chinese passenger.
BA only works if going from a Chinese city - UK/Ireland vv.
Dec 19, 2019, 9:19 am
#39
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Agree nearly all points but feeding Chinese traffic into BA is not happening unless London moves location into eastern/Northern Europe and join Schengen, plus the airside transit visa requirement abolished for the Chinese passport.
As you can see - AY fits to be a good Asia - Europe hub operator. So is KL and LH. London is too far and too much trouble to transit in for a Chinese passenger.
BA only works if going from a Chinese city - UK/Ireland vv.
As you can see - AY fits to be a good Asia - Europe hub operator. So is KL and LH. London is too far and too much trouble to transit in for a Chinese passenger.
BA only works if going from a Chinese city - UK/Ireland vv.
And since they're going to get visa, which is normally handled by travel agency for then, not much bigger hurdle to get two
Last edited by percysmith; Dec 19, 2019 at 9:45 am
Dec 19, 2019, 9:52 am
#40
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Both AA and BA needed a Chinese partner airline, and they both chose CZ. If you want to fly from LHR to Shenyang, BA-CZ will become the best option...after CZ launches PKX-SHE flights. The problem is that PKX is new, and CZ isn't going to fully ramp it up until it has a better understanding of local demand (e.g. PKX-SHE needs O&D traffic).
For QF, CAN alone might have sold them on CZ, but AA and BA would not have invested in CZ in the absence of PKX.
For QF, CAN alone might have sold them on CZ, but AA and BA would not have invested in CZ in the absence of PKX.
Dec 19, 2019, 1:21 pm
#41
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Apparently CA have a 45% stake in CX.
Dec 19, 2019, 3:32 pm
#42
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On this point, you are very wrong, Sir!
You might know Chinese aviation very well, but you have no idea about CX.
Between 2002-2006, Cathay Pacific worked on oneworld's behalf trying to persuade China Eastern to join oneworld. It launched a vicious attack with Air China to stop Singapore Airlines investing in China Eastern.
The end result is Singapore Airlines did not invest in China Eastern, CAAC sold Dragon Air to Cathay, and Air China got investments in CX instead.
After the failed recruit of China Eastern, Cathay tried to influence the boardroom of Air China to lure Air China switch to oneworld. That happened between 2006-2012. It did not come to fruition as the then CAAC chief Mr. Li had a fixation on star alliance and very fond of Germany (Lufthansa).
Cathay also considered Shenzhen Airlines until Air China grabbed the airline.
Your statement that CX does not want any Chinese airline is totally out of reality. Its efforts trying to sign up China Eastern and Air China showed that it wanted a full Mainland oneworld member. But it has its own idea on which airline it would like to recruit.
Following the decade of failure in recruit, CX CEO openly suggested that it will let AA and BA to take over the recruitment of oneworld membership in China. I believe it happened in either 2015 or 2016 World Routes conference. The interview was done by Flight Global if my memory served me right, and I read the similar article on Southern China Morning Post in that time. But I could not locate that article any more after 2018.
Also I would like to draw your attention to when trouble started to brew earlier this year, one of the CX pilot shared some security information about some travelling police chief to Chengdu online. CX management got summoned. Normally, CX and other Macau, Hong Kong and Taiwanese carriers would be dealt with CAAC headquarter special liaison office, but instead the CAAC Central and Southern Bureau acted and summoned CX management. It is considered in China that CAAC Central and Southern Bureau is the back garden of China Southern. Because China Southern is based in Guangzhou, which is managed by CAAC Central and Southern Bureau. Many China Southern management team member would go on become bureaucratic in CAAC Central and Southern Bureau. I am not drawing any conclusion here, but I want people to notice the irregularity in this issue. You may draw your own conclusion.
You might know Chinese aviation very well, but you have no idea about CX.
Between 2002-2006, Cathay Pacific worked on oneworld's behalf trying to persuade China Eastern to join oneworld. It launched a vicious attack with Air China to stop Singapore Airlines investing in China Eastern.
The end result is Singapore Airlines did not invest in China Eastern, CAAC sold Dragon Air to Cathay, and Air China got investments in CX instead.
After the failed recruit of China Eastern, Cathay tried to influence the boardroom of Air China to lure Air China switch to oneworld. That happened between 2006-2012. It did not come to fruition as the then CAAC chief Mr. Li had a fixation on star alliance and very fond of Germany (Lufthansa).
Cathay also considered Shenzhen Airlines until Air China grabbed the airline.
Your statement that CX does not want any Chinese airline is totally out of reality. Its efforts trying to sign up China Eastern and Air China showed that it wanted a full Mainland oneworld member. But it has its own idea on which airline it would like to recruit.
Following the decade of failure in recruit, CX CEO openly suggested that it will let AA and BA to take over the recruitment of oneworld membership in China. I believe it happened in either 2015 or 2016 World Routes conference. The interview was done by Flight Global if my memory served me right, and I read the similar article on Southern China Morning Post in that time. But I could not locate that article any more after 2018.
Also I would like to draw your attention to when trouble started to brew earlier this year, one of the CX pilot shared some security information about some travelling police chief to Chengdu online. CX management got summoned. Normally, CX and other Macau, Hong Kong and Taiwanese carriers would be dealt with CAAC headquarter special liaison office, but instead the CAAC Central and Southern Bureau acted and summoned CX management. It is considered in China that CAAC Central and Southern Bureau is the back garden of China Southern. Because China Southern is based in Guangzhou, which is managed by CAAC Central and Southern Bureau. Many China Southern management team member would go on become bureaucratic in CAAC Central and Southern Bureau. I am not drawing any conclusion here, but I want people to notice the irregularity in this issue. You may draw your own conclusion.
Dec 19, 2019, 5:05 pm
#43
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Perhaps I conveyed my point a little too strongly, and it's possible that my CX info is a bit stale at present, but to be clear, I'm talking about OneWorld, not bilateral partnerships. Of course CX wants to partner with Chinese airlines, but my former executive contact there (who now works for a different airline) told me clearly that CX/KA wants to be the gateway to China for OneWorld.
Dec 19, 2019, 10:06 pm
#44
Join Date: Jan 2006
Programs: AAdvantage Asia Miles Air China
Posts: 870
There is a thread about this somewhere. BA has restricted availability in Asia via CX to late bookings owing to fraudulent activity. I hope this is what you mean by this.
Dec 19, 2019, 10:19 pm
#45
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Nice post and just to add, another reason China Eastern did not join (and there had been a central government statement that they wanted a Chinese airline in each alliance) was that the Chairman of China Southern (Liu Shaoyong?) who took CZ into SkyTeam then became Chairman of China Eastern and promptly took MU into SkyTeam as well. I do enjoy that irony