Hainan vs. OneWorld

Overthecascades · Fri Mar 24, 2017 3:25 pm

OneWorld needs a large partner in China. Hainan is the only one of China big four which is not part of an alliance. Historically CX had been against HU joining OW. However time has changed. The China Mainland market is becoming every day increasingly important. CX is a founding member of OW and an important one, but what it does is holding other OW members back offering a more seamless product to OW flyers in general.

Is it about time?

aaway · Fri Mar 24, 2017 3:41 pm

If the question is, "Should CX change it's stance regarding Hainan/OW membership?", with Hainan competing with Cathay ex-HKG, I just don't see a viable solution.

georgiabill · Fri Mar 24, 2017 3:48 pm

How does the reported interest of AA taking a stake in China Southern effect HU joining Oneworld? I do believe Oneworld and CX do need a mainland China partner. Does HU or CZ bring more to the table. My bet HU with all it's stakes in various airlines in China might be the better fit.
Your thoughts?

mercure1 · Fri Mar 24, 2017 7:04 pm

I am not sure either HU nor CZ would be welcomed in OW while CX is around.

HNA group owns two airline in HKG that compete increasiy aggressive against CX while CZ its growing international hub only 120km from HKG.

I am not even sure competiton authorities would ever allow CX to do anything with the HNA airlines in particular due concerns over market concentration.

c933103 · Fri Mar 24, 2017 7:40 pm

georgiabill wrote:
How does the reported interest of AA taking a stake in China Southern effect HU joining Oneworld? I do believe Oneworld and CX do need a mainland China partner. Does HU or CZ bring more to the table. My bet HU with all it's stakes in various airlines in China might be the better fit.
Your thoughts?

CX is already codesharing flights with CA. CA is also one of CX's major stockholder. They definitely would not want an airline they heavily invested in to cooperate with another mainland china airline?

Overthecascades · Fri Mar 24, 2017 9:52 pm

Should CX exercise such veto rights when collectively OW is missing out on huge opportunities?

aaway · Fri Mar 24, 2017 10:20 pm

georgiabill wrote:
How does the reported interest of AA taking a stake in China Southern effect HU joining Oneworld?

In my opinion, no change in current status. In my view, the AA-CZ tieup is more singular, end solution to specific issues affecting the purported partners.

Another way of looking at this - over the course of a decade, AA has compiled a tick-box list of scenarios involving the Chinese market. Beyond having established a fairly large slate of own-metal flying, all of the, IMO, most desirable outcomes will likely not to come to fruition (or, at least, soon enough

):
(1) CX influencing CA to change alliances.
(2) HU joining the alliance.
(3) Perhaps KE changing alliances.
(4) 3rd party codesharing (via JL)

At least the governance structure of OW allows individual members to pursue strategic solutions where desirable. And AA-CZ is reflective of this.

aaway · Fri Mar 24, 2017 11:57 pm

aaway wrote:
(4) 3rd party codesharing (via JL)

That should read, "3rd country codesharing" since China does not permit such activity.

usflyer msp · Sat Mar 25, 2017 1:03 am

In an ideal world, MU & CX would be in OW, CZ & HU would be in ST and CA+ ZH would be in Star. But the world is not ideal...

xiaotung · Sat Mar 25, 2017 1:29 am

What's stopping CX from leaving oneworld? Most major oneworld carriers are working against them. QF tried to undermine them with the defunct Jetstar venture in HKG and are now working with both MU and CZ. AA will now likely invest in CZ with their hub CAN virtually next door to HKG. No major cooperation with any other oneworld carrier.

NichCage · Sat Mar 25, 2017 2:13 am

Can someone explain to me why Hainan cannot join oneworld? Sorry to ask, but I don't know anything on the issue.

Overthecascades · Sat Mar 25, 2017 3:13 am

xiaotung wrote:
What's stopping CX from leaving oneworld? Most major oneworld carriers are working against them. QF tried to undermine them with the defunct Jetstar venture in HKG and are now working with both MU and CZ. AA will now likely invest in CZ with their hub CAN virtually next door to HKG. No major cooperation with any other oneworld carrier.

+1

Overthecascades · Sat Mar 25, 2017 3:14 am

NichCage wrote:
Can someone explain to me why Hainan cannot join oneworld? Sorry to ask, but I don't know anything on the issue.

What I hear is that HU had a subsidiary in HKG which is in direct competition with CX.

Cunard · Sat Mar 25, 2017 4:35 am

I think there are more obvious reasons than the one your referring to!

aaway · Sat Mar 25, 2017 7:30 pm

Cunard wrote:
I think there are more obvious reasons than the one your referring to!

The one "obvious reason" that stands out is the fact that HU doesn't enjoy 'most favored' status with CAAC.

hongkongflyer · Sun Mar 26, 2017 4:22 am

Overthecascades wrote:
NichCage wrote:
Can someone explain to me why Hainan cannot join oneworld? Sorry to ask, but I don't know anything on the issue.

What I hear is that HU had a subsidiary in HKG which is in direct competition with CX.

Not one but two:

Hong Kong Airlines HX as a full services carrier, which is now explanning their network to Ausitralia and Canada (soon) and hopfully USA.
HK Express UO as a LCC focus in Asia, especially Japan (which is one of the most important markets of CX in　Ａｓｉａ．

Ｂｏｔｈ　ａｒｅ　ｇｒｏｗｉｎｇ　ｒａｐｉｄｌｙ　ａｎｄ　ｈｅａｒｔｉｎｇ　ＣＸ＇ｓ　ｙｉｅｌｄ　Ｓｅｒｉｏｕｓｌｙ．

Ｉ　ｂｉｔ　ｔｈａｔ　ＣＸ　ｗｉｌｌ　ｅｖｅｎｔｕａｌｌｙ　ｍｏｖｅｄ　ｔｏ　ＳＡ，
ｗｈｉｌｅ　ＣＺ　ｊｏｉｎｉｎｇ　ＯＷ　ａｎｄ　ＨＵ　ｊｏｉｎｉｎｇ　ｅｉｔｈｅｒ　ＯＷ　ｏｒ　ＳＴ

Overthecascades · Sun Mar 26, 2017 4:30 am

hongkongflyer wrote:
Overthecascades wrote:
NichCage wrote:
Can someone explain to me why Hainan cannot join oneworld? Sorry to ask, but I don't know anything on the issue.

What I hear is that HU had a subsidiary in HKG which is in direct competition with CX.

Not one but two:

Hong Kong Airlines HX as a full services carrier, which is now explanning their network to Ausitralia and Canada (soon) and hopfully USA.
HK Express UO as a LCC focus in Asia, especially Japan (which is one of the most important markets of CX in　Ａｓｉａ．

Ｂｏｔｈ　ａｒｅ　ｇｒｏｗｉｎｇ　ｒａｐｉｄｌｙ　ａｎｄ　ｈｅａｒｔｉｎｇ　ＣＸ＇ｓ　ｙｉｅｌｄ　Ｓｅｒｉｏｕｓｌｙ．

Ｉ　ｂｉｔ　ｔｈａｔ　ＣＸ　ｗｉｌｌ　ｅｖｅｎｔｕａｌｌｙ　ｍｏｖｅｄ　ｔｏ　ＳＡ，
ｗｈｉｌｅ　ＣＺ　ｊｏｉｎｉｎｇ　ＯＷ　ａｎｄ　ＨＵ　ｊｏｉｎｉｎｇ　ｅｉｔｈｅｒ　ＯＷ　ｏｒ　ＳＴ

Thanks for the info.

xiaotung · Sun Mar 26, 2017 4:34 am

hongkongflyer wrote:
Overthecascades wrote:
NichCage wrote:
Can someone explain to me why Hainan cannot join oneworld? Sorry to ask, but I don't know anything on the issue.

What I hear is that HU had a subsidiary in HKG which is in direct competition with CX.

Not one but two:

Hong Kong Airlines HX as a full services carrier, which is now explanning their network to Ausitralia and Canada (soon) and hopfully USA.

HX can't fly to Australia because CX have used the maximum number of flights allowed between HKG and Australia, which is one of the reasons why HNA bought into VA. Now both VA and QF are pissing CX off. No reason not to withraw from oneworld.

workhorse · Tue Mar 28, 2017 8:28 am

hongkongflyer wrote:

Ｓｅｒｉｏｕｓｌｙ, I ｂｉｔｔｈａｔＣＸｗｉｌｌｅｖｅｎｔｕａｌｌｙｍｏｖｅｄｔｏＳＡ，ｗｈｉｌｅＣＺｊｏｉｎｉｎｇＯＷａｎｄＨＵｊｏｉｎｉｎｇｅｉｔｈｅｒＯＷｏｒＳＴ

I think it is unlikely that CZ moves to OW. OW is the weakest of the three alliances, there is no reason for CZ to abandon their SkyTeam membership. HU on the other hand, might be very interested by OW since their joining of ST or SA is problematic because of their biggest mainland rivals being already in these alliances. i guess the biggest reason for them not being in OW already is precisely because of CX.

workhorse · Wed Mar 29, 2017 9:30 am

workhorse wrote:
I think it is unlikely that CZ moves to OW. OW is the weakest of the three alliances, there is no reason for CZ to abandon their SkyTeam membership. HU on the other hand, might be very interested by OW since their joining of ST or SA is problematic because of their biggest mainland rivals being already in these alliances. i guess the biggest reason for them not being in OW already is precisely because of CX.

Well, my wrong! Just read this:

http://www.scmp.com/business/companies/ ... hareholder

Wonder what they say about that on 8 Scenic Rd...

zeke · Wed Mar 29, 2017 12:13 pm

mercure1 wrote:
HNA group owns two airline in HKG that compete increasiy aggressive against CX while CZ its growing international hub only 120km from HKG.

More like capacity dumping than competition, without the large amounts of cash from the HNA group is throwing into the airlines they would be insolvent. They have been reporting a loss every year.

Overthecascades · Wed Mar 29, 2017 3:55 pm

With China Southern tying up with AA, and DL/KE signing JVA, this is becoming more interesting to watch. Maybe Hainan won't join OW after all.

dmorbust · Wed Mar 29, 2017 4:52 pm

aaway wrote:
georgiabill wrote:
How does the reported interest of AA taking a stake in China Southern effect HU joining Oneworld?

In my opinion, no change in current status. In my view, the AA-CZ tieup is more singular, end solution to specific issues affecting the purported partners.

Another way of looking at this - over the course of a decade, AA has compiled a tick-box list of scenarios involving the Chinese market. Beyond having established a fairly large slate of own-metal flying, all of the, IMO, most desirable outcomes will likely not to come to fruition (or, at least, soon enough ):
(1) CX influencing CA to change alliances.
(2) HU joining the alliance.
(3) Perhaps KE changing alliances.
(4) 3rd party codesharing (via JL)

At least the governance structure of OW allows individual members to pursue strategic solutions where desirable. And AA-CZ is reflective of this.

(3) is out the door now

hongkongflyer · Mon Apr 03, 2017 2:29 am

workhorse wrote:
hongkongflyer wrote:

Ｓｅｒｉｏｕｓｌｙ, I ｂｉｔｔｈａｔＣＸｗｉｌｌｅｖｅｎｔｕａｌｌｙｍｏｖｅｄｔｏＳＡ，ｗｈｉｌｅＣＺｊｏｉｎｉｎｇＯＷａｎｄＨＵｊｏｉｎｉｎｇｅｉｔｈｅｒＯＷｏｒＳＴ

I think it is unlikely that CZ moves to OW. OW is the weakest of the three alliances, there is no reason for CZ to abandon their SkyTeam membership. HU on the other hand, might be very interested by OW since their joining of ST or SA is problematic because of their biggest mainland rivals being already in these alliances. i guess the biggest reason for them not being in OW already is precisely because of CX.

ST has two members in China, benefits CZ gets from ST is not that large.

WPvsMW · Mon Apr 03, 2017 4:09 am

SCMP... always amusing.. "China Southern is the last of the country’s three dominant carriers to sign a foreign partner. Cathay Pacific Airways, based in Hong Kong, owns about 18 per cent of flag carrier Air China,..."
http://www.scmp.com/business/companies/ ... hareholder

downdata · Mon Apr 03, 2017 4:29 am

CX should join *A then all problems are solved.

jbpdx · Mon Apr 03, 2017 4:41 am

American's pending investment in China Southern and the JV between Korean and Delta will push China Southern into OneWorld.

Sydscott · Mon Apr 03, 2017 6:07 am

Overthecascades wrote:
With China Southern tying up with AA, and DL/KE signing JVA, this is becoming more interesting to watch. Maybe Hainan won't join OW after all.

There's also another very good reason why Hainan won't be entering OW and that is that Hainan owns a stake in Virgin Australia and is deepening ties with them. So this is an area where at least 2 OW airlines, CX and QF, would have very little reason to allow Hainan into OW.

Worth noting that QF also has a codeshare relationship with China Southern and has formed a JBA with China Eastern. So there is already plenty of OW contact with China Southern and this is likely to grow in future.

aaway · Mon Apr 03, 2017 8:15 pm

Sydscott wrote:
Overthecascades wrote:
With China Southern tying up with AA, and DL/KE signing JVA, this is becoming more interesting to watch. Maybe Hainan won't join OW after all.

There's also another very good reason why Hainan won't be entering OW and that is that Hainan owns a stake in Virgin Australia and is deepening ties with them. So this is an area where at least 2 OW airlines, CX and QF, would have very little reason to allow Hainan into OW.

I'm somewhat torn. If the status quo remains, I'm in total agreement. But what happens should CX leave oneworld? Should that scenario occur, I could see oneworld extending the invitation, but with a caveat regarding the VA stake.

The hindrance I see there is a question of whether the HNA Group would be willing to tamp the empire building for the sake of joining an alliance.

Sydscott · Mon Apr 03, 2017 10:26 pm

aaway wrote:
Sydscott wrote:
Overthecascades wrote:
With China Southern tying up with AA, and DL/KE signing JVA, this is becoming more interesting to watch. Maybe Hainan won't join OW after all.

There's also another very good reason why Hainan won't be entering OW and that is that Hainan owns a stake in Virgin Australia and is deepening ties with them. So this is an area where at least 2 OW airlines, CX and QF, would have very little reason to allow Hainan into OW.

I'm somewhat torn. If the status quo remains, I'm in total agreement. But what happens should CX leave oneworld? Should that scenario occur, I could see oneworld extending the invitation, but with a caveat regarding the VA stake.

The hindrance I see there is a question of whether the HNA Group would be willing to tamp the empire building for the sake of joining an alliance.

If CX leaves OW then there is less reason to ask Hainan and more reason to get the 10 pound gorilla, China Southern, into OW. Why go for a minnow when you can get the biggest player in the market?

aaway · Mon Apr 03, 2017 10:49 pm

Sydscott wrote:
aaway wrote:
Sydscott wrote:

If CX leaves OW then there is less reason to ask Hainan and more reason to get the 10 pound gorilla, China Southern, into OW. Why go for a minnow when you can get the biggest player in the market?

CAN isn't a substitute for HKG.

downdata · Tue Apr 04, 2017 12:34 am

aaway wrote:
Sydscott wrote:
aaway wrote:

CAN isn't a substitute for HKG.

Do BA/AA/QF need HKG?

mercure1 · Tue Apr 04, 2017 1:48 am

downdata wrote:
aaway wrote:
Sydscott wrote:

CAN isn't a substitute for HKG.

Do BA/AA/QF need HKG?

Well HKG is one of the worlds top global commercial centers.

downdata · Tue Apr 04, 2017 2:26 am

mercure1 wrote:
downdata wrote:
aaway wrote:

CAN isn't a substitute for HKG.

Do BA/AA/QF need HKG?

Well HKG is one of the worlds top global commercial centers.

Yes. They all fly to HKG, but do they need a hub at HKG? e.g. QF competes heavily with CX on AU-HKG routes.

Sydscott · Tue Apr 04, 2017 4:05 am

downdata wrote:
mercure1 wrote:
downdata wrote:

Do BA/AA/QF need HKG?

Well HKG is one of the worlds top global commercial centers.

Yes. They all fly to HKG, but do they need a hub at HKG? e.g. QF competes heavily with CX on AU-HKG routes.

Yes BA / AA / QF need to fly into Hong Kong. It's a very strong business market for all of them and for both QF and BA a very strong O&D market. I don't see CAN and HKG as an either/or proposition so while a major hub in CAN, and lesser hubs in PEK, CKG etc are all to the benefit of OW in China, all of those airlines would still serve HKG.

downdata · Tue Apr 04, 2017 4:28 am

Sydscott wrote:
downdata wrote:
mercure1 wrote:

Well HKG is one of the worlds top global commercial centers.

Yes. They all fly to HKG, but do they need a hub at HKG? e.g. QF competes heavily with CX on AU-HKG routes.

Yes BA / AA / QF need to fly into Hong Kong. It's a very strong business market for all of them and for both QF and BA a very strong O&D market. I don't see CAN and HKG as an either/or proposition so while a major hub in CAN, and lesser hubs in PEK, CKG etc are all to the benefit of OW in China, all of those airlines would still serve HKG.

Yes but why does oneworld need CX. Last time i checked you can fly to HKG without being in the same alliance as CX.

ord787 · Tue Apr 04, 2017 4:28 am

as previous post what holding CX back to leave OW? and CX doesn't have any JV with any OW members if i'm correct..
perhaps swapping alliance founder between CX and SAS? since one of friend work at ORD told me that half of SAS connection are booked thru AA vs UA at ORD?

TheLion · Tue Sep 05, 2017 1:41 pm

Wonder if there has been any update on Hainan joining an alliance? Or China Southern leaving Skyteam for oneworld...

GCT64 · Tue Sep 05, 2017 2:32 pm

This discussion is fraught with "what-ifs" and obstacles but the most logical steps seem to me to be:
CX leaving OW for Star (aligning with CA), then
CZ leaving Skyteam for OW (distributing the 3 major Chinese carriers one to each global alliance (rather than having 2 in Skyteam))

QuawerAir · Tue Sep 05, 2017 2:39 pm

TheLion wrote:
Wonder if there has been any update on Hainan joining an alliance? Or China Southern leaving Skyteam for oneworld...

I have always been wondering why there are three Chinese airlines (mainland China) in SkyTeam (MU, CZ and MF) but zero in Oneworld. China Southern would be cool to see as a member of OW, Hainan as well.

Here is one latest news related to the topic:

http://airlinegeeks.com/2017/08/13/american-gets-closer-to-china-southern-questions-regarding-cathay-pacific-partnership-remain/

TheLion · Tue Sep 05, 2017 2:47 pm

QuawerAir wrote:
TheLion wrote:
Wonder if there has been any update on Hainan joining an alliance? Or China Southern leaving Skyteam for oneworld...

I have always been wondering why there are three Chinese airlines (mainland China) in SkyTeam (MU, CZ and MF) but zero in Oneworld. China Southern would be cool to see as a member of OW, Hainan as well.

Here is one latest news related to the topic:
http://airlinegeeks.com/2017/08/13/american-gets-closer-to-china-southern-questions-regarding-cathay-pacific-partnership-remain/

Yes I have wondered that too for a long time. I also read that article; it was interesting indeed.

TurnaroudUK · Tue Sep 05, 2017 3:43 pm

downdata wrote:
CX should join *A then all problems are solved.

Half of BA's frequent flyers would cry having to go back to a sub par business product on BA

9w748capt · Tue Sep 05, 2017 4:12 pm

Would suck if CX leaves ow - would take away just about the only reliable avenue for premium AA redemptions. Having said that, I cannot see why CX would benefit from either ST or *A over ow. OW may be smaller but all the airlines are big hitters IMO. AA/BA/QF/JL/CX cover the majority of the world's high yielding markets.

TheLion · Tue Sep 05, 2017 5:31 pm

TurnaroudUK wrote:
downdata wrote:
CX should join *A then all problems are solved.

Half of BA's frequent flyers would cry having to go back to a sub par business product on BA

hahahaha very true. Flyertalk would be positively exploding with red-faced rage and self-immolation :bomb:

wenders825 · Tue Sep 05, 2017 5:58 pm

CX isn't leaving oneworld. as much as this site wants them to for some reason

GamingPolaris · Tue Sep 05, 2017 6:06 pm

9w748capt wrote:
Would suck if CX leaves ow - would take away just about the only reliable avenue for premium AA redemptions. Having said that, I cannot see why CX would benefit from either ST or *A over ow. OW may be smaller but all the airlines are big hitters IMO. AA/BA/QF/JL/CX cover the majority of the world's high yielding markets.

Elaborate on "big hitters."

TheLion · Tue Sep 05, 2017 7:29 pm

wenders825 wrote:
CX isn't leaving oneworld. as much as this site wants them to for some reason

I would be inclined to agree, although their increasingly close ties with Air China could see this change. If CX were to leave OW, I could see Hainan joining, perhaps CZ too.

bzcat · Tue Sep 05, 2017 11:37 pm

QuawerAir wrote:
TheLion wrote:
Wonder if there has been any update on Hainan joining an alliance? Or China Southern leaving Skyteam for oneworld...

I have always been wondering why there are three Chinese airlines (mainland China) in SkyTeam (MU, CZ and MF) but zero in Oneworld. China Southern would be cool to see as a member of OW, Hainan as well.

MF is 55% owned by CZ so that's why MF is in Skyteam. While MF has separate management and branding, CZ does have pretty strong influence and board control of MF. This is like someone asking why OS and LH are both in Star Alliance, or why KL and AF are both in Skyteam.

MU was originally in OneWorld but switched to Skyteam because the CEO went from CZ to MU and he liked Skyteam better. MU wasn't getting much out of OW membership anyway and the switch was around the time China and Taiwan started schedule flights and MU was at risk of being the only "Big 3" without a partner: CI+CZ and BR+CA both would have offered daily or multiple daily flights on the high yield routes. MU would have been left with operating Taiwan flights on its own, or seek partnership/code share with smaller carriers from Taiwan. So the decision for MU to switch from OneWorld to SkyTeam was surprisingly simple and with clear benefits. MU and CZ both end up cooperating with CI on flights between China and Taiwan.

9w748capt · Wed Sep 06, 2017 12:03 am

GamingPolaris wrote:
9w748capt wrote:
Would suck if CX leaves ow - would take away just about the only reliable avenue for premium AA redemptions. Having said that, I cannot see why CX would benefit from either ST or *A over ow. OW may be smaller but all the airlines are big hitters IMO. AA/BA/QF/JL/CX cover the majority of the world's high yielding markets.

Elaborate on "big hitters."

I already did

TheLion · Wed Sep 06, 2017 12:06 am

bzcat wrote:
QuawerAir wrote:
TheLion wrote:
Wonder if there has been any update on Hainan joining an alliance? Or China Southern leaving Skyteam for oneworld...

I have always been wondering why there are three Chinese airlines (mainland China) in SkyTeam (MU, CZ and MF) but zero in Oneworld. China Southern would be cool to see as a member of OW, Hainan as well.

MF is 55% owned by CZ so that's why MF is in Skyteam. While MF has separate management and branding, CZ does have pretty strong influence and board control of MF. This is like someone asking why OS and LH are both in Star Alliance, or why KL and AF are both in Skyteam.

MU was originally in OneWorld but switched to Skyteam because the CEO went from CZ to MU and he liked Skyteam better. MU wasn't getting much out of OW membership anyway and the switch was around the time China and Taiwan started schedule flights and MU was at risk of being the only "Big 3" without a partner: CI+CZ and BR+CA both would have offered daily or multiple daily flights on the high yield routes. MU would have been left with operating Taiwan flights on its own, or seek partnership/code share with smaller carriers from Taiwan. So the decision for MU to switch from OneWorld to SkyTeam was surprisingly simple and with clear benefits. MU and CZ both end up cooperating with CI on flights between China and Taiwan.

MU have never been in oneworld...

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