China Southern Airlines
China Southern Airlines is a major airline in China, headquartered in Guangzhou, Guangdong. It is one of the three major airlines in the country, along with Air China and China Eastern Airlines.
Established on 1 July 1988 following the restructuring of CAAC that acquired and merged several domestic airlines, the airline became the world's sixth-largest airline measured by passengers carried and Asia's largest airline in fleet size, revenue, and passengers carried. In 2024, it ranked as the world's ninth-largest airline by brand market value.
With its main hubs at Guangzhou Baiyun International Airport and Beijing Daxing International Airport, the airline operates more than 2,000 flights to more than 200 destinations daily and was a member of SkyTeam until 1 January 2019. The airline started a frequent flyer program partnership with American Airlines in March 2019. The logo of the airline consists of a kapok flower on a blue tail fin. The company slogan is Fly towards your dreams. The airline also operates cargo flights branded under the name China Southern Cargo.
The parent company of China Southern Airlines Company Limited is China Southern Air Holding Company, a state-owned enterprise that is supervised by the State-owned Assets Supervision and Administration Commission of the State Council.
History and development
Founding
China Southern Airlines was established on July 1, 1988, as part of the Chinese government's initiative to decentralize the Civil Aviation Administration of China, and liberalize the Chinese aviation market. This restructuring aimed to transform CAAC's regional divisions into independent commercial entities. China Southern emerged from the former Guangzhou Regional Administration of CAAC, marking its inception as a separate airline. However, the airline's first commercial operations under its own name and livery didn't launch until February 1991.The airline completed its decentralization from CAAC when it gained independence on 10 October 1993. During the airline's early years, the carrier was the dominant domestic carrier. Together with the two major airlines of China – Air China and China Eastern – the airline handled half of the passenger traffic carried by all Chinese carriers. Owing to Air China's status as the country's flag carrier, the airline is entitled to extensive international service rights, with China Eastern and China Southern's international networks confined to mainly East Asia and within Asia, respectively. Like other Chinese carriers, China Southern was subjected to CAAC's exclusive right to grant route-specific operating licenses and domestic prices.
Expansion
To raise its operating standards and distance itself from mostly unprofitable second and third-tier domestic airlines, the carrier signed agreements with several foreign carriers regarding staff training and aircraft maintenance, with the ultimate aim of being listed on the, possibly as soon as early 1995.Starting in the mid-1990s, China Southern sought to expand its international reach beyond Asia. In December 1995, the Chinese and United States governments signed an aviation agreement that would allow the commencement of non-stop air services between the two countries. After having been granted the right to establish services to Amsterdam in early 1996, the airline started Guangzhou–Beijing–Amsterdam, its first long-haul route, in November 1996. The following year, the carrier commenced non-stop trans-Pacific services to Los Angeles, as well as services to Brisbane.
The start of European and American services coincided with the arrival of the long-range Boeing 777s, the first of which was delivered in late December 1995, as well as a general expansion and upgrade of the carrier's fleet and the associated facilities. Due to engine certification and labor relations issues, the delivery of the first Boeing 777 was more than a month behind schedule. As a result, the carrier considered, but ultimately decided against, leasing the Boeing 747-400, which would have been used to cover anticipated delays as well as to launch trans-Pacific services to the United States. Nevertheless, the airline planned to double its fleet of 67 aircraft. In April 1996, the Chinese government placed an order, on China Southern's behalf, for 10 Airbus A320s; the delivery of the first aircraft, and China Southern's first Airbus, was made the following year. Guangzhou Aircraft Maintenance Engineering Company, which was jointly established with Lockheed Aircraft Services International and Hutchinson Whampoa, was carrying out expansion of its aircraft maintenance facilities in anticipation of the increase.
In July 1997, China Southern Airlines went public, listing on both the Hong Kong and New York Stock Exchanges. The airline raised $600–$700 million, which was mainly used to expand its fleet, pay off debt, and invest in other key areas. In 2003, China Southern Airlines listed domestically on the Shanghai Stock Exchange. By 1997, the airline, along with its joint-venture airlines Xiamen Airlines, Shantou Airlines and Guangxi Airlines, was carrying some 15 million passengers per year using about 90 aircraft, operating about 270 routes among 68 destinations and almost 2,450 flights per week. The airline group's revenue totaled some US$1.4 billion with a net income of $90 million.
Mergers and acquisitions
The end of the 1990s was a period of consolidation for the Chinese airline industry. Initially, China Southern looked to acquire several smaller non-profitable domestic carriers as it sought to highlight its expansion plans intoaise funds; among the deals was the purchase of 60% shares of Guizhou Airlines. Due to the weakening economy amidst the 1997 Asian financial crisis and intense competition among the some 30 Chinese carriers, in 1998, CAAC considered a comprehensive restructuring of the industry that would see the consolidation of the airlines into three or five carrier groups. At one stage, it was reported that CAAC was contemplating a forced merger of Air China and China Southern. Given the latter's dual listing in Hong Kong and New York, it was thought that such a merger would have eased Air China's path towardits own share offering. China Southern confirmed that such talks between them were occurring, although they ultimately proved fruitless. Had the merger proceeded, their combined fleets would have numbered some 250 aircraft, which would have made the resultant airline the largest in Asia.Although there was considerable resistance to CAAC's call to rationalise the industry, in July 2000, the administrative body announced that the 10 airlines under its direct management will be merged into three airline groups, revolving around Air China, China Eastern Airlines, and China Southern itself. Within a month, China Southern had started absorbing Zhengzhou-based Zhongyuan Airlines, which at the time operated five Boeing 737s and two Xian Y-7 turboprops. The carrier would later merge with Shenyang-based China Northern Airlines and Urumqi-based Xinjiang Airlines to form China Southern Air Holding Co., a process that took more than two years and would culminate in China Southern's acquisition of their US$2 billion's worth of assets in November 2004. Consequently, China Southern's fleet expanded from some 140 aircraft to over 210. The takeovers meant that the carrier became the main airline in Shenyang and Ürümqi, with passenger numbersjumping from 28.2 million in 2004 to 44.1 million in 2005. As a result, China Southern Airlines became one of the "Big Three" carriers in the country. Since then, it has successively taken over shareholding stocks and joined the equity in numerous Chinese carriers. The airline is the major shareholder of Xiamen Airlines and Chongqing Airlines ; it also invests in Sichuan Airlines.
Amidst the major consolidation of the airline industry, China Southern in April 2000 started dedicated cargo services from Shenzhen using a Boeing 747-200F wet-leased from Atlas Air. To capitalize on the economic growth of the Pearl River Delta region, the carrier constructed a dedicated cargo center in Shenzhen. Successful operations prompted an order for two Boeing 747-400Fs the following year. The airline by now had commenced operations to Sydney and Melbourne.
In September 2003, China Southern signed a purchase agreement for four Airbus A330-200s to be delivered in 2005. This was part of the order placed in April by the China Aviation Supplies Imp. & Exp. Group covering 30 aircraft. China Southern became the first mainland Chinese A330 operator with the delivery of the first example in February 2005. China Southern followed up in September 2005 with a further order for eight A330-300s and two A330-200s.
The month of January 2005 proved to be significant for civil aviation in China in general and China Southern in particular. In preparation for the 2008 Summer Olympics in Beijing, China Southern, and the Chinese government placed several landmark widebody-aircraft orders from Airbus and Boeing. More specifically, on 28 January 2005, the carrier became the first Chinese carrier to commit to the Airbus A380 double-deck aircraft, when it signed a general-terms agreement for five examples worth US$1.4 billion at catalog prices. On the same day, China Southern, along with five other domestic carriers, placed a bulk order for 60 Boeing 7E7s. The aircraft was worth $7.2 billion at list prices, and the first example was expected to be delivered in time for the Olympics; however, the first aircraft did not arrive until June 2013.
Earlier during the month, the CAAC had approved the temporary operations of charter flights between mainland China and Taiwan. On the same day as the widebody orders, a China Southern Airlines Boeing 777–200 took off from Guangzhou and landed in Taipei the following day, becoming the first mainland Chinese aircraft to land in the Republic of China since 1949, when the Kuomintang were involved in Chinese Civil War with the Chinese Communist Party. The flight carried 242 passengers home after the Lunar New Year. Previously, passengers travelling between the mainland and Taiwan had to transit through a third port such as Hong Kong or Macau. Within three years, in July 2008, a China Southern Airlines Airbus A330 carrying 230 tourists again landed in Taipei. The governments of China and Taiwan had both agreed to allow direct flights across the Taiwan Strait in June, ending six decades of limited air travel between the two sides. Following the flight, China Southern Airlines Chairman and pilot of the flight, Liu Shaoyong, said, "From today onward, regular commercial flights will replace the rumbling warplanes over the skies of the Taiwan Strait, and relations between the two sides will become better and better."
Following two years of negotiations which had started in August 2004, in late June 2006, China Southern signed an agreement with SkyTeam, one of the three global airline alliances, formally pledging itself to the improvement of standards with the aim of its eventual joining. According to the agreement, the airline committed to the upgrade of handling services, facilities, and training of at least 75% of its staff to SkyTeam's standards. On 15 November 2007, China Southern officially joined SkyTeam, becoming the eleventh carrier to join the grouping and the first mainland Chinese carrier to join an airline alliance. The welcoming ceremony was attended by high-ranking Chinese government and SkyTeam corporate officials and was held at the Great Hall of the People. The carrier's integration with the alliance continued with its entry into SkyTeam Cargo in November 2010, and its joint-venture carrier Xiamen Airlines' formal joining in November 2012. With China Eastern's ascension in June 2011, SkyTeam furthered its leading presence on the mainland Chinese market; the remaining Big Three carrier, Air China, is a member of Star Alliance.
It followed up with another Airbus order on 7 July 2006, when it confirmed a deal covering the purchase of 50 more A320 narrow bodies for delivery in 2009. The order included 13 A319-100s, 20 A320-200s and 17 A321-200s, reportedly worth $3.3 billion at list prices. In December 2005, China Southern Airlines along with CASGC, announced an order with Boeing for 9 Boeing 737-700s and 11 Boeing 737-800s.
In June 2006, China Southern Airlines confirmed another order of three Boeing 737-700s and seven Boeing 737-800s. The deliveries would continue through 2010. On 18 October 2006, China Southern Airlines placed an order for six Boeing 777 freighters, striding forward a brand new step in its cargo development. The aircraft would be delivered from November 2008 to July 2010.
On 20 August 2007, China Southern Airlines announced its intention for an order of 25 Boeing 737-700s and 30 Boeing 737-800s, which will be delivered from May 2011 to October 2013. It was a mere two months before, on 23 October 2007, China Southern Airlines announced that it had placed an order for 10 additional Airbus A330-200s. The order has a listed price of US$1.677 billion and the aircraft will be delivered from March 2010 to August 2012.