Qatar Airways acquires a share in the largest Chinese airline. The airline has acquired a share of 5% in the China Southern Airlines Co Trading Company at the end of December and now wants to expand the cooperation. Based on current stock prices, the investment is worth approximately 530 million USD.
Entering China Southern can help Qatar Airways to overcome the economic blockade by its neighbors. The airline has long tried to deal with the conflict with its Arab neighbors, as it is not allowed to fly to destinations in Saudi Arabia or the United Arab Emirates and is looking for new routes and partners. On the other hand, the move could upset the competitors from the US – especially American Airlines, which in turn participates in China Southern and intends to expand its ties with the Chinese airline this year.
The three largest American airlines (American, Delta Air Lines, and United Continental) are currently arguing with the US government to take action against Qatar Airways for alleged government subsidies. The Arab airline rejects the allegations.
Its participation in China Southern is controversial, as some Chinese airlines are also supported by the state through subsidies. But here, the US rivals avoid any criticism of this practice, while abruptly condemning subsidies in the Middle East. This shows how important the Chinese market is and how closely the interests of the Chinese and US airlines are intertwined. American Airlines owns 7.4% of China Southern. Two years ago, Qatar Airways attempted to buy the American share, but the negotiations failed.
Qatar Airways is already participating in three other American Airlines partners: International Consolidated Airlines Group SA, the parent company of British Airways and Iberia, Chilean Latam Airlines and Cathay Pacific.
