Some links to products and travel providers on this website will earn Traveling For Miles a commission which helps contribute to the running of the site – I’m very grateful to anyone who uses these links but their use is entirely optional. The compensation does not impact how and where products appear on this site and does not impact reviews that are published. For more details please see the advertising disclosure found at the bottom of every page.
These are tumultuous times for the oneworld alliance with more infighting than ever before and with at least one member already openly saying that it’s considering exiting as soon as next year.
It’s no secret that a number of oneworld’s members don’t really get on and some even openly dislike each other, so it seems only a matter of time before something gives and we see one or more significant changes to the membership.
The big oneworld news right now is that Qatar Airways isn’t at all happy with American Airlines (who is?) or Qantas but a seemingly unrelated piece of news, which broke yesterday, may be the one which ends up having the most significant effect on oneworld.
Yesterday morning China Southern announced that it would be leaving SkyTeam after it said that the benefits of remaining in the alliance were outweighed by the costs. Ordinarily that would be the end of the story but there may be a little bit more at play here.
American Airlines bought a 2.76% share in China Southern back in 2017 and there are rumors circulating suggesting that the Chinese carrier may be about to move to oneworld to join up with its US part-owner.
China Southern’s exit from SkyTeam may have more to do with its wish to link up more closely with American than it does with the costs of SkyTeam membership.
So far this may still all sound pretty innocuous….but consider the feelings of Cathay Pacific in this scenario.
China Southern is China’s biggest carrier by passenger volume and is headquartered in Guangzhou…just 84 miles from Cathay Pacific’s home base of Hong Kong.
I cannot imagine a scenario in which Cathay Pacific would be happy to see China Southern become a member of oneworld – their route maps overlap far too much and they would be in direct competition to a far greater degree than any other two oneworld airlines.
At this point one could argue that Cathay Pacific would simply block China Southern’s membership of oneworld and that would be end of that….but I don’t think it’s that simple.
Cathay Pacific has been a grumbling oneworld member for as long as I can remember and its relationship with Qantas is frayed (to say the least!) There has long been speculation that Cathay Pacific would be happier outside the oneworld alliance but, despite the rumors, no exit has ever transpired.
Perhaps the reasons to leave weren’t strong enough in the past but, faced with an attempt to incorporate China Southern into oneworld (a move which could be sponsored by American and Qantas), Cathay may decide that it’s better (cheaper) to quit rather than to fight China Southern’s membership.
Just in case you’re thinking that this still probably isn’t enough to push Cathay Pacific out of the door, consider the following facts:
- Qatar Airways owns ~10% of Cathay Pacific
- Qatar Airways is in dispute with Qantas and American Airlines
- Qatar Airways is on record as saying that it’s considering leaving oneworld and forging closer relationships with equity partners.
With those things in mind is it really that unthinkable for Cathay Pacific to leave oneworld? I don’t think so.
It’s not that big of a leap to see a situation in which both Qatar Airways and Cathay Pacific leave the oneworld alliance and go on to form agreements with the likes of BA, Iberia and LATAM (all of whom Qatar Airways part-owns) and perhaps even agreements with other airlines that suit them better than their current oneworld partners.
We could be in for some very interesting times in the oneworld alliance or all parties may grow up and agree to get along…but I can’t help but feel that a schism is on the way.
Should all of this transpire (don’t forget that I’m only speculating here) it would be a big hit to the oneworld alliance and it would be a huge hit to these of us who currently enjoy redeeming our AAdvantage Miles on Qatar Airways and Cathay Pacific – oneworld would have to recruit some pretty impressive new members to keep itself relevant…..or to even have a reason to exist.
the partnership then ownership of CX did jack on the HKG-DOH route. At the start of that partnership, CX and QR each had 1 (?) HKG-DOH flight, with complementary flight times. It flopped so badly that CX, an airline known for their regional tags in middle east even when flights can’t support a nonstop, has completely exited DOH as a market.
That said, I agree CZ *should* join oneworld instead of staying independent. Whether CX will veto or defect will be fun to watch (personally I want them to defect but that’s just my wishes not based on objective analysis)
HKG is too important of a market for OneWorld. CAN is not HKG and CAN is a significantly lower yielding market compared to HKG.
Also the Chinese carriers are the biggest offenders when it comes to capacity dumping, so losing a significant chunk of the HKG premium market and gaining a partner that will undermine your revenue premiums will be a bad move for OneWorld.
CX, like SQ, needs to be more collaborative with their partners and stop behaving like their partners are inferior.
Do you think there’s a chance that oneworld simply gets wound up and the factions that get along form a new arrangement along the lines of a JV/JBA? Or would that be too hard to do considering QR doesn’t get on with AA and BA is very entwined with AA (for example)?
Comments are closed.