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American Airlines to Buy Minority Stake in China Southern Airlines

  • VOA News

American Airlines planes sit at a gate at Washington's Ronald Reagan National Airport.

American Airlines says it will purchase a minority stake in China Southern Airlines, a deal that will give the carrier greater access to the world's two largest travel markets.

American Airlines, the world's largest by scheduled passengers carried, will buy $200 million in China Southern stock, the largest airline in China.

The deal gives American a 2.68 percent stake in China Southern and gives the two carriers the green light to move forward with a strategic cooperation.

The agreement, subject to regulatory approvals, is the second such deal between major airlines in the United States and China. Delta Airlines bought 3.55 percent of China Eastern Airlines for $450 million in 2015.

Code sharing, which allows two airlines to more efficiently schedule passengers on each other's flights, will begin later this year. This will give American Airlines access to more than 70 Chinese destinations while China Southern will get a share of more than 80 destinations and North and South America.

China is the world's most populous country. Greater demand for air travel among China's growing middle class is expected to see it surpass the United States as the world's biggest travel market in coming years.

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