China Southern, American Airlines announce tie-up

China Southern Airlines said yesterday 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. — AFP