China Southern Airlines exceeds 55x flights target to Australia/NZ. Competition regulators query JVs

Mission accomplished: China Southern Airlines is already surpassing its goal of having 55 weekly flights to Australia and New Zealand by the end of 2015. From about 25 weekly flights in 2011, China Southern in Dec-2015 will have 65 weekly flights. This includes three daily flights - one on an A380 - to Sydney, a frequency that compares to Cathay Pacific's four and Singapore Airlines' average 4.5.

Competitors are responding with a series of JVs that await regulatory approval. Qantas-China Eastern received a draft rejection while Air New Zealand-Air China awaits approval and Air New Zealand-Cathay Pacific needs re-authorisation. The Qantas-China Eastern initial rejection appears misguided while New Zealand stakeholders are questioning the benefits of the Air NZ-Cathay alliance in a market that where capacity has decreased by 18% while the Air NZ-Singapore Airlines alliance has grown capacity by 20%.

It might appear lines in the market have been drawn, but it is still early days. China Southern's achievement in the market is only its first. The question is what its next goal is, and the answer is being kept closely guarded.