Qatar Airways Buys 5% Stake in China Southern

Jan 2, 2019

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Doha-based carrier Qatar Airways has bought a 5% stake in China’s largest airline, China Southern, the companies announced Wednesday.

According to Qatar, the acquisition became official on Dec. 28, 2018, but it did not disclose how much the stake in Guangzhou-based China Southern cost.

The new purchase is not out of the ordinary for Qatar, a carrier that holds many stakes in other airlines and aviation ventures, including a 20% share in British Airways’ owner IAG aviation group, a 10% stake in Cathay Pacific, a 10% stake in South American airline LATAM and a “minority stake” in private jet charter firm JetSuiteX.

The deal follows China Southern’s recent departure from the SkyTeam alliance, as well as Qatar’s looming threats to leave its respective airline alliance, Oneworld, due to its ongoing feud with partner American Airlines.

One of Qatar’s largest airline shares — its 49% stake in Air Italy — has recently rekindled a years-long standoff between the Gulf carrier and the three major US airlines. Delta, American and United have accused Qatar of using its minority Air Italy stake to circumvent a pledge against operating fifth freedom flights out of the US.

In June 2017, Qatar attempted to buy a 10% stake in American Airlines, which the carrier swiftly condemned, calling the idea “puzzling, at best, and concerning, at worst.” Qatar said it wouldn’t buy more than a 4.75% stake without approval from AA’s board and backed off the acquisition.

The stake in China Southern will be useful for Qatar down the line, as China is predicted to be the world’s largest aviation market by 2022, according to analysis from the International Air Transport Association.

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