Air France-KLM and China Southern Airlines are reportedly planning a JV for Paris-Guangzhou services, with the partnership to be reportedly modelled on Air France-KLM’s agreement with Delta Air Lines on the North Atlantic (Les Echos, 19-Feb-2010). The agreement will reportedly be expanded to include cargo services in the longer term.
China Southern and Air France-KLM to cooperate on Paris-Guangzhou sector
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China Southern Airlines deflects yield pressure concerns. Long haul focus shifts to North America
China Southern Airlines may be Asia's largest airline, but it has one of the smallest long haul networks. China Southern has shifted growth to international markets, which represented only 17% of capacity in 2009 but doubled to 34% in 2016. Its long haul plank has been Australia and New Zealand, funnelling traffic from around China down to its southern hub at Guangzhou. China Southern has met its objectives for Australia/NZ and now turns its focus to the market that has preoccupied most other Northeast Asian airlines: North America.
China Southern plans to increase flights from five daily to 11 daily, about the size that ANA is today – and larger than Air China and China Eastern. Although China Southern can build on the principle of using Guangzhou as a North-South hub, North America is a radically different proposition. Guangzhou's southern positioning limits exposure to the Chinese market that China Southern knows best. China Southern will need to target connections to Southeast Asia and India, which have only been a small component of Air China and China Eastern's network.
Airline strikes: 2016 a peak year for Europe's legacy airlines. Wakeup time, as LCCs pick them off
Pilot strikes at Lufthansa. Again. A strike ballot among British Airways cabin crew. A guilty verdict for Air France workers who assaulted an executive during a union protest. These were all headlines in late Nov-2016, following Air France pilot and cabin crew strikes in summer 2016. Labour relations at Europe's three biggest legacy airline groups are an ongoing challenge.
A CAPA report in Jun-2016 highlighted the growing number of articles on CAPA's website mentioning the word 'strike'. It raised the possibility that if the rate continued through the year, 2016 could be the biggest year for strike-related articles since before the global financial crisis. With a little under a month still to go, this year has already comfortably passed this milestone.
To a large extent labour unrest grows as airline industry profits increase. However, rather than hoping for an industry downturn to reverse the rise in the cycle of strikes, airline CEOs are talking tough – a line long taken by IAG's Willie Walsh. Lufthansa's Carsten Spohr has said that taking on the pilots is "about the future of Lufthansa", noting that it has “no chance of survival" if it gives in to pay demands (Bloomberg, 24-Nov-2016).