Aviation industry takes the exit from Skyteam alliance with a clash of Cathay Pacific

Published on : Monday, November 27, 2017

Cathay-Pacific-Group-selects-A321neo-ciThe airline industry is bracing for the Chinese biggest carrier to pull out of the global alliance and join another in a move that could have a significant impact on Hong Kong’s Cathay Pacific group.



Delta Airlines is one of the founding airlines of the Skyteam alliance, which China Southern Airlines may pull out of after an internal review of the benefits and impact of a defection.



There most of the major airline companies are signed up to one of three global airline clubs – Skyteam, Star Alliance and Oneworld – and in the two decades of their existence. It has been rare for an airline to leave, let alone defect to another.



With China Southern eyeing membership in Oneworld, which already includes Cathay Pacific and Cathay Dragon, flagship carrier of Hong Kong could in turn move to Star Alliance.




Remaining in Oneworld with China Southern would bring the two carriers’ home bases of Hong Kong and Guangzhou too close together, with destinations they serve overlapping and the airlines competing for the same pool of long-haul travellers.




Joining with the Star Alliance, the same club as national carrier Air China, would bring Cathay closer to its second-biggest shareholder. Guangzhou, the main airport for Southern part of China, is only 120km from Cathay’s home base, and handled 60 million travellers last year, 10 million fewer than Hong Kong saw. For now, China Southern was still playing an important role in aviation industry.




In the year 2014, Oneworld, the first choice airline alliance, picked up both US Airways and Brazil’s Tam Airlines from Star after they merged with American Airlines and the national carrier of Chile respectively.




The aviation business ties are stronger with Star members Lufthansa, Air China and New Zealand’s national airline. Moving to Star would place it in the same club as Singapore Airlines.




However, with the arrival of Oneworld’s Qatar Airways as the third-biggest shareholder in Cathay makes such a step uncertain. The Passengers could face significant changes as well.




The perks of the travelers for loyalty after joining an airline’s frequent flier club extend beyond the original carrier, allowing them to earn and spend air miles on partner airlines within their global airline grouping.




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