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Emirates is China Southern’s second Gulf partner
February 15th 2019
China Southern fattened up right before the Year of the Pig, signing a MoU to codeshare with Emirates. Read More » This came a month after Qatar Airways disclosed it was taking a minority stake in China Southern.
Emirates may feel snubbed since its China Southern discussions started before Qatar’s equity move. China Southern COO Han Wensheng differentiated Emirates from Qatar in a statement, saying: “Emirates is our first bi-directional partner in the Middle East.” The two partners will explore further cooperation, such as in the typical areas of loyalty and lounges, but also in the less commonly cited areas of freight and airport collaboration.
While China Southern’s newest partners are both connecting airlines from the Gulf, there are differences. Emirates is not taking equity of China Southern while Qatar did not immediately announce codeshares. Emirates immediately announced codeshares to eight Chinese cities.
Both Gulf operators would be interested in greater access to domestic China, including from China Southern’s Guangzhou hub (where they both fly) and also Beijing (where they also both fly) once China Southern moves to new Beijing Daxing airport and expands. Emirates’ China network is larger in first tier cities and its presence there is also larger than Qatar’s presence in first tier cities. Qatar serves more secondary cities in China than Emirates.
For Chinese aviation, Emirates and Qatar’s home hubs represent different markets. China has little point-to-point traffic to Doha so any partnership with Qatar would focus on markets beyond Doha.
Dubai has become a significant tourism destination for mainland Chinese since Dubai announced visa on arrival in late 2016. Mainland Chinese visitors were the seventh-largest source market for Dubai tourism in 2016, but in 2017 became the fifth-largest market as annual arrivals grew 41% to 764,000. In the first 11 months of 2018 (latest data available), Chinese visitors to Dubai were 779,000. China was the only top five source market for Dubai tourism that grew in 11M2018. India, Saudi Arabia, the UK and Oman all posted declines while China expanded 12%. The growth in 2018 equates to about an additional widebody aircraft’s worth of tourists a day.
No Chinese airline serves Doha, but there are growing China-Dubai flights, including from China Southern. China Southern can supplement Dubai traffic with Emirates codeshares. Initial codeshares are around the Middle East and to African destinations including Seychelles and Lagos.
Chinese airlines have been under government pressure to extend their reach globally, and particularly Africa, but economics have proved challenging. China Eastern and Etihad formed a partnership in 2012 that has been occasionally expanded. Air China has no Gulf partner.
