As 2018 drew to a close, China Southern Airlines marked
the 11th anniversary of its Sky Team membership by announcing plans to leave the global airline alliance when its
contract expires Jan. 1, 2019, in order to pursue “new partnerships” with other carriers.
Te airline has appeared increasingly isolated in Sky-Team over the past 12 months since rival China Eastern
Airlines deepened ties with fellow members Delta Air Lines
and Air France-KLM.
One of China Southern’s frst moves has been to boost
cooperation with minority shareholder and oneworld
member American Airlines by expanding an existing codeshare agreement on domestic and China-US routes.
But the airline may not have fnished there. While it is
no doubt seeking to speed its growth through further partnerships, the carrier could well make a move to another
alliance, with oneworld the most likely destination.
Oneworld’s network in China is currently limited to
destinations served by Cathay Pacifc Airways and foreign
carriers, so the addition of a member based in the world’s
second-largest aviation market would be an obvious boon.
It would also soften the blow of Qatar Airways’ seemingly
inevitable and self-imposed divorce from the alliance (
although oneworld efectively did this in early December
when it announced that Royal Air Maroc will become its
next full member).
However, the addition of China Southern could have
further repercussions. Cathay has been a member of oneworld since its inception in 1998, but the close proximity
of competitor China Southern’s Guangzhou base to Cathay’s Hong Kong hub would present a major problem.
Te possibility of Cathay jumping ship—potentially for
Star Alliance—therefore should not be ruled out.
Consolidation in the low-cost market
After the high-profle demises of airberlin, Monarch
Airlines and NIKI in 2017, Primera Air, Cobalt Air,
Small Planet Airlines and NextJet were among the airlines to bite the dust in 2018. And the wave of airline
failures could well continue into 2019 as carriers feel the
pinch of higher fuel costs, the efects of air trafc control
strikes and overcapacity in certain markets.
Europe is one region to watch where the market remains highly fragmented. OAG fgures show that by capacity, Europe’s top fve airlines held a combined 30%
share of the market in 2018. Contrast that with the US,
where the consolidated fve major airlines accounted for
Consolidation could be especially keen among operators of long-haul, low-cost services on the high-volume
transatlantic market. Te collapse of Primera Air and the
fnancial struggles of Icelandic LCC WOW Air have demonstrated how tough the operating environment is, with
intense competition resulting in pressure to reduce fares.
International Airlines Group (IAG), the owner of British Airways (BA), has already muscled in by launching
long-haul LCC Level and could make another play for
Norwegian in 2019. Although IAG’s previous takeover
ofers were rebufed by Norwegian’s board, the addition of
the Scandinavian carrier to a group that already includes
BA, Iberia, Aer Lingus, Level and Vueling is a tempting
prospect for IAG and would create a powerful force on
From big takeovers to a shake-up of airline alliances,
ASM SVP-consulting and product management
Nigel Mayes casts his eye on what might shake the
aviation world in 2019.