China Eastern-Qantas & Air China-Air New Zealand JVs show renewed interest from Chinese airlines

The spectacular growth of China Southern Airlines in Australia and New Zealand came with the tradeoff that Air China and China Eastern lost interest in Australia and New Zealand, seeing China Southern's flood of capacity drastically hurting yields and making expansion too difficult. This is now changing, first with China's regulator signalling China Southern needs to slow its international expansion, and more recently with two proposed joint-ventures, one between China Eastern and Qantas and the other between Air China and Air New Zealand. The Chinese carriers are taking the view a deep partnership can help them where size is not to their advantage.

The two joint ventures are distinctly different. China Eastern will likely gain more from its partnership with Qantas while Air New Zealand can potentially gain more by having the JV mend its frayed relationship with Air China. Further, China Eastern's more ideally located Shanghai hub gives greater potential growth from the JV whereas Air China will be challenged with its northern Beijing hub.