China Southern to bail out of

CHINA Southern Airlines has said it will leave the SkyTeam airline alliance at the start of next year to meet the needs of the company’s own development strategy.

SkyTeam is one of the world’s three major airline alliances and had two big Chinese carriers, China Southern and rival China Eastern Airlines Corp Ltd, as members, which is unusual given they operate in the same market.

The three alliances, which also include Star Alliance and oneworld, provide reciprocal benefits for passengers such as lounge use and frequent flyer points and also transfer passengers in a boost to revenue.

China Southern, the country’s largest airline by passenger numbers, is leaving SkyTeam because it believes it is expensive relative to the benefits of membership, a source said.

It will consider joining oneworld but has not yet made a decision and would not do so immediately. Cathay Pacific, as a founding member of the oneworld alliance, however, has the right to veto other entrants from the greater China region.

China Southern’s Guangzhou hub competes against Cathay Pacific for international traffic.

In a statement to the Shanghai stock exchange, China Southern said it did not expect its decision to not renew its SkyTeam membership to significantly impact its operations.

SkyTeam has said it will work