A few months back, American announced a plan to purchase $200 million of China Southern Airlines’ stock. This transaction would give the US’ largest carrier access to China. China Southern is China’s largest carrier based on number of passengers carried. The American China Southern Partnership comes with a lot of possible benefits in synergies. Here is what I expect to come out of this deal.

China Southern A380

China Southern A380

Codesharing

I expect both airlines to begin codesharing as soon as before the end of this year. China Southern is part of Skyteam, and Delta is Skyteam’s lead airline. This means that China Southern will curtail, or cancel altogether their codeshare partnership with Delta. American will become China Southern’s main US codeshare partner. On the other side, American currently codeshares with Hainan Airlines on a selected number of flights. I don’t expect this partnership to disappear, but it will be limited. China Southern will place their code on all American flights to China, and vice versa. The main selling point for the deal is feeding traffic into regional destinations from each airline’s’ hubs.

It is worth noting that China Southern’s main hub is in Guangzhou. This city is very close to Cathay Pacific’s Hong Kong base. I don’t see, however, this straining the relationship between AA and CX. I will note, however, that this could be an asset for DFW airport if China Southern launches a flight between Guangzhou and Dallas. It would make sense, since American already flies from DFW to HKG, and has a relationship with CX on this route.

American A330

American A330

Reciprocal Mileage Earning and Redeeming

As the codeshare is implemented, I expect to see reciprocity announced between the two airline’s frequent flyer programs. This means that you will be able to earn miles, redeem them and qualify for elite status with each airline. I expect this to be the biggest benefit for passengers of each airline.

China Southern A330

China Southern A330

Lounge Access, Elite Benefits, Etc

We can expect to see elite benefits be honored in each carrier as the airlines cozy up. China Southern will have access to American’s lounges in the US, and vice versa. I hope to see the elite benefits, such as priority boarding, checked baggage, etc, be applied as soon as the codeshare agreement starts.

American 767 @ MIA

American 767 @ MIA

What I don’t expect, yet

I would LOVE to see China Southern join oneWorld. It would fill one of the two largest gaps in the oneWorld network. This, however, is not seen as likely in the near future. The two airlines will remain in separate alliances. This will be very problematic, given Delta and China Southern will have only minimal ties. How this will materialize is unclear. We can only wait to see how CZ, DL and AA manage this split. I don’t expect any other major shift in CZ’s partnerships, as I believe they are happy with most of their Skyteam partners. The benefit of oneWorld is that they are very flexible with partners, which means that if CZ does in fact join OW, they could maintain some of their Skyteam partners.

China Southern A380 Take-off

China Southern A380 Take-off

Landing Thoughts:

As a frequent American Airlines traveler, this is exciting news. I am very happy to see airlines create new partnerships. I do believe that airline alliances are still relevant, but I don’t think they are the only way to make partnerships. The new American China Southern partnership will provide a lot of benefits for both carriers. I can’t wait to be able to redeem my AA miles on CZ.

 

What do you think? What do you make of the AA-CZ partnership? Are you glad to see these two airlines partner up? What will be the next step in airline partnerships? Let us know!

 

If you want to stay up to date with the latest airline news follow me on Twitter, Facebook or LinkedIn!

Also follow Travel Update and Boarding Area on Twitter!

 

H/T: CNBC, USA Today, and AA