Chinese carriers to merge??? [rumor]
Oct 26, 2015, 9:42 pm
#1
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Chinese carriers to merge??? [rumor]
I don't have a link, but this weekend the print edition of Wall Street Journal contained a small paragraph saying that there is "speculation" that some mainland Chinese airlines will merge. They mentioned China Air and China Southern.
As these carriers are currently members of *A and SkyTeam respectively, one naturally wonders to which alliance a potential merged airline would belong. Currently SkyTeam has both MU and CZ. This gives the alliance good coverage of the growing market in mainland China.
As these carriers are currently members of *A and SkyTeam respectively, one naturally wonders to which alliance a potential merged airline would belong. Currently SkyTeam has both MU and CZ. This gives the alliance good coverage of the growing market in mainland China.
Oct 26, 2015, 11:11 pm
#2
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Here's the link: the way I read it things are inconclusive.
Don't Get Carried Away by Air China Merger Talk
Don't Get Carried Away by Air China Merger Talk
Airline merger speculation has taken flight in China, but investors should stay grounded.
Yet another possibility is that Beijing will seek to merge the parent companies of the three top airlines to create a kind of aviation holding company
Oct 26, 2015, 11:35 pm
#3
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I don't have a link, but this weekend the print edition of Wall Street Journal contained a small paragraph saying that there is "speculation" that some mainland Chinese airlines will merge. They mentioned China Air and China Southern.
As these carriers are currently members of *A and SkyTeam respectively, one naturally wonders to which alliance a potential merged airline would belong. Currently SkyTeam has both MU and CZ. This gives the alliance good coverage of the growing market in mainland China.
As these carriers are currently members of *A and SkyTeam respectively, one naturally wonders to which alliance a potential merged airline would belong. Currently SkyTeam has both MU and CZ. This gives the alliance good coverage of the growing market in mainland China.
Oct 27, 2015, 12:56 am
#4
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I don't have a link, but this weekend the print edition of Wall Street Journal contained a small paragraph saying that there is "speculation" that some mainland Chinese airlines will merge. They mentioned China Air and China Southern.
As these carriers are currently members of *A and SkyTeam respectively, one naturally wonders to which alliance a potential merged airline would belong. Currently SkyTeam has both MU and CZ. This gives the alliance good coverage of the growing market in mainland China.
As these carriers are currently members of *A and SkyTeam respectively, one naturally wonders to which alliance a potential merged airline would belong. Currently SkyTeam has both MU and CZ. This gives the alliance good coverage of the growing market in mainland China.
Why would you assume they would join the same alliance? The split alliance strategy seems to work pretty well for CA and CX.
Oct 27, 2015, 1:03 am
#5
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If two different carriers merge and become one, it would be difficult to combine operations but keep the FF programs separate. Look at the UA/CO and AA/US mergers as examples. In each case, the combined airline belongs to a single alliance. [DL/NW would be another example, but they belonged to the same alliance before the merger.]
Oct 27, 2015, 1:04 am
#6
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(Maybe they "merge back" some small players like MF, 3U or OQ to their parents.)
Oct 27, 2015, 3:47 pm
#8
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I think it may be instructive to refer to this list I made a while ago: http://www.flyertalk.com/forum/other...hina-list.html
The big problem with airlines in China is the operational inefficiency created by the archaic provincial and municipal interests that forces the Big 4 to invest in various regional affiliates that are "paper airlines". Things will be a lot better if the Big 3 are allowed to shut down their "paper airlines" and consolidate their marketing branding and sales operations.
As far as merging 2 or all 3 of the former CAAC carriers, I think it is a foolish idea. The impetus seems to come from certain circles in Chinese Govt that is really stuck in an outdated mindset. The idea is to form the biggest airline in the world so that Chinese airline can be compared to the big American airlines in terms of fleet size. In another word, it's a chest thumping idea not rooted in any sort of commercial reality.
China (ex-Hong Kong) has basically 4 mainline airlines (CA, MU, CZ, HU) and 2 viable low cost carrier (H0, 9C) covering a country that is the size of continental US and with 4.5 times the population. It is in need of more airlines, not fewer (more real airlines, not more "paper airlines" with provincial names on the fuselage that only fly to the province capital). The real problem is the lack of access to PVG/SHA and PEK and merging the big 3 is not going to change that. Without fundamental change in how slots and profitable routes are awarded at PVG/SHA and PEK, any talk of airline merger or reform is pointless. The current landscape in China basically ensure the Big 3 cannot be challenged.
The big problem with airlines in China is the operational inefficiency created by the archaic provincial and municipal interests that forces the Big 4 to invest in various regional affiliates that are "paper airlines". Things will be a lot better if the Big 3 are allowed to shut down their "paper airlines" and consolidate their marketing branding and sales operations.
As far as merging 2 or all 3 of the former CAAC carriers, I think it is a foolish idea. The impetus seems to come from certain circles in Chinese Govt that is really stuck in an outdated mindset. The idea is to form the biggest airline in the world so that Chinese airline can be compared to the big American airlines in terms of fleet size. In another word, it's a chest thumping idea not rooted in any sort of commercial reality.
China (ex-Hong Kong) has basically 4 mainline airlines (CA, MU, CZ, HU) and 2 viable low cost carrier (H0, 9C) covering a country that is the size of continental US and with 4.5 times the population. It is in need of more airlines, not fewer (more real airlines, not more "paper airlines" with provincial names on the fuselage that only fly to the province capital). The real problem is the lack of access to PVG/SHA and PEK and merging the big 3 is not going to change that. Without fundamental change in how slots and profitable routes are awarded at PVG/SHA and PEK, any talk of airline merger or reform is pointless. The current landscape in China basically ensure the Big 3 cannot be challenged.
Last edited by bzcat; Oct 27, 2015 at 4:43 pm
Oct 28, 2015, 10:28 pm
#10
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Oct 29, 2015, 12:01 pm
#13
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China Southern Airlines 中国南方航空 (CZ) - SkyTeam
* Xiamen Airlines 厦门航空 (MF) (Full SkyTeam membership)
* Chongqing Airlines 重庆航空 (OQ)
* Sichuan Airlines 四川航空 (3U)
- Chengdu Airlines 成都航空 (EU) (formerly United Eagle Airlines/UEAir 联鹰航空)
- Hebei Airlines 河北航空 (NS)
* Guizhou Airlines 貴州航空 (G4)[China Northern Airlines 中国北方航空 (CJ) merged with CZ in 2003]
[China Xinjiang Airlines 中国新疆航空 (XO) merged with CZ in 2003]
[Zhongyuan Airlines 中原航空 (Z2) disbanded by CZ in 2000]
Last edited by bzcat; Oct 29, 2015 at 12:07 pm
Oct 29, 2015, 6:47 pm
#14
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Yep... don't fall into the trap of thinking CZ as China Southern. It grabbed 2 other CAAC carriers earlier on and expanded into Western China. It is in fact all over China with 4 main hubs strategically located in CAN (Southeast), PEK (northeast), CKG (southwest), URC (northwest). And it has control MF and QQ, 2 largest "municipal" airlines in China, and owns a big stake in 3U.
China Southern Airlines 中国南方航空 (CZ) - SkyTeam
* Xiamen Airlines 厦门航空 (MF) (Full SkyTeam membership)
* Sichuan Airlines 四川航空 (3U)
China Southern Airlines 中国南方航空 (CZ) - SkyTeam
* Xiamen Airlines 厦门航空 (MF) (Full SkyTeam membership)
* Sichuan Airlines 四川航空 (3U)
Nov 1, 2015, 12:45 am
#15
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Another piece today, this time on SCMP, is relaunching the rumour:
http://www.scmp.com/news/china/econo...a-southern-may
If it happens (and the article suggests at the end that corruption may be the trigger to CA action) it can be reasonably expected Skyteam to be the losing end of this round of consolidation.
http://www.scmp.com/news/china/econo...a-southern-may
If it happens (and the article suggests at the end that corruption may be the trigger to CA action) it can be reasonably expected Skyteam to be the losing end of this round of consolidation.
Last edited by CXBA; Nov 1, 2015 at 12:47 am Reason: grammar