Qatar Airways acquires 5% of China Southern Airlines
Qatar’s flagship airline is seeking new partners and routes after being blocked from flying to Saudi Arabia and the United Arab Emirates
Dubai/Beijing — Qatar Airways has acquired a 5% stake in China Southern Airlines, the state-owned Gulf carrier said on Wednesday, in a move to gain access to the fast-growing mainland Chinese market.
Qatar Airways also owns a 20% stake in British Airways (BA) parent, International Consolidated Airlines Group, 10% of South America’s Latam Airlines Group, 49% of Italy’s Meridiana, and 9.99% stake in Hong Kong’s Cathay Pacific.
Qatar’s flagship airline has sought new partners and routes after it was blocked last year from flying to the lucrative markets of Saudi Arabia and the United Arab Emirates (UAE) due to restrictions imposed by those countries.
Saudi Arabia, UAE, Bahrain and Egypt have imposed a political and economic boycott on Qatar since June 2017, accusing it of supporting terrorism, which Doha denies.
China Southern, in a separate statement, said Qatar Airways may consider increasing its stake in the airline in the next 12 months. Qatar had no previous investment in the Chinese airline.
Qatar Airways is the second foreign carrier to have a stake in China Southern along with American Airlines. The Chinese carrier left the SkyTeam airline alliance at the start of the year.
There are opportunities for “us to work together and build a long term relationship in ways that would bring benefits to customers of both airlines”, said Qatar Airways CEO Akbar al-Baker.
Ajith K, director of Asia transport at UOB Kay Hian, said given that China Southern is the biggest competitor of Cathay Pacific in Greater China, this deal could strengthen the China Southern’s position at the Hong Kong carrier’s expense.
“What Qatar is doing, seems to me ... to gain access to the Chinese market. Secondly, it’s probably that they are hedging against their bet given they own almost 10% in Cathay Pacific.”