American Airlines To Buy China Southern Stake

American Airlines has agreed to buy a small stake in China Southern Airlines for USD$200 million in a move to improve connections between two of the world’s largest aviation markets.

The investment will be in the form of new shares listed on the Hong Kong stock exchange. After the transaction American will hold 2.68 percent of China Southern’s share capital.

“We are two of the biggest carriers in the world, and our networks are highly complementary, American’s president Robert Isom said in a statement.

“Our cooperation has the possibility to create enormous benefits for our industry and customers around the world as we work to offer them more travel options and better value,” China Southern’s chairman Wang Chang Shun said.

The two carriers expect to start codesharing and establish interline agreements later this year, expanding access to destinations in China and the United States.

American will gain access to 40 destinations through China Southern’s Beijing hub and 30 through Shanghai. China Southern passengers will get improved access to American’s domestic flights from Los Angeles, San Francisco and New York JFK - 80 destinations in total.

The codeshare routes are expected to be available for frequent flyer points on both airlines.

American serves Hong Kong, Beijing and Shanghai from Dallas/Fort Worth; Hong Kong and Shanghai from LAX; and Beijing and Shanghai from Chicago O’Hare.

China Southern currently has flights to Los Angeles, San Francisco and New York Kennedy.