Love is in the air. American Airlines is reportedly looking at taking a stake in China Southern Airlines. On Thursday, trading in the Hong Kong and Shanghai-listed shares of the Chinese carrier were suspended, pending an announcement. The US company, which is valued at $20bn, may spend $200m, equating to 2 per cent of China Southern’s current $10bn market capitalisation. There would be logic to a deal in which the airlines created a common network.
Competition for Chinese travellers has been intensifying. Carriers, including privately owned Chinese airlines such as HNA subsidiary Hainan, are expanding. Direct international flights from populous “second tier” cities offer options to the fleet of foot. Hainan flies direct from Xian to Tokyo, for example, while KLM goes from Chengdu to Amsterdam.
It is not only the Chinese hinterland that is opening up. This week, Hainan increased direct flights between Beijing and Manchester, a route that eliminates stopovers historically required by international carriers to reach the northern UK city.