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    Established by Fathi Ibrahim Bayoud 2005 - Homs

    China Southern, American Airlines announce tie-up

    | 2017-03-28 09:45:18
    China Southern, American Airlines announce tie-up

    China Southern Airlines said Tuesday it would sell almost a one-tenth stake to American Airlines in a $200 million tie-up that could see two of the world's biggest carriers cooperate in a range of areas.

    American Airlines is the world's largest carrier by scheduled passengers carried, while China Southern is fourth globally and the biggest in Asia, according to the International Air Transport Association (IATA).

    The deal could give American a foot in the door of China's rapidly expanding air transport market, while China Southern said the move would support its own ambitions of expanding its global presence.

    China Southern will sell more than 270 million, or 8.83 percent, of its Hong Kong-listed shares to American, according to a statement by the Chinese airline filed with the Hong Kong stock exchange.

    The HK$5.74 per share fee was a 4.6 percent premium to Monday's closing price and values the deal at HK$1.55 billion ($200 million).

    China Southern also is listed in Shanghai. The deal gives American 2.68 percent of all the Chinese carrier's shares traded across both markets.

    China Southern said in the statement that the two companies "may seek to increase cooperation" in code-sharing, staffing, sales, passenger loyalty programs and sharing of airport facilities, but gave no specifics.

    The link-up will help China Southern to "enhance its internationalization, increase its competitiveness and influence in the global aviation market".

    It will use the raised funds to "optimize its capital structure" and "improve its net assets".

    No statement by American Airlines was immediately seen.

    As of end-2016, China Southern said it operated more than 2,000 flights in more than 40 countries while American operates 6,700 flights per day in more than 50 countries.

    Increasing demand for air travel among China's growing middle class is expected to make it the world's biggest market in coming years.

    After the announcement, China Southern shares fell 2.19 percent in Hong Kong but were 1.65 percent higher in Shanghai.















    Keywords:  China
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