Loading

China Southern and Hainan Airlines evaluate Virgin Australia stake to grow tourism potential

Chinese visitors are reshaping tourism flows and aviation opportunities in many markets. This has been readily apparent in Australia, where China Southern in the space of a few years has become a household name, and Chinese tourists are the second largest visitor source. The next manifestation could be a Chinese airline purchasing the stake in Virgin Australia that Air New Zealand is looking to divest itself of. China Southern and Hainan Airlines are evaluating the opportunity, according to the Australian Financial Review.

China Southern would benefit from a stronger local partner after its previous partner Qantas formed a JV with the rival China Eastern. With every Chinese visitor taking two to three domestic Australian flights, an equity stake could allow the Chinese airline to capture back revenue streams. China Southern could also invest as a defensive move. Hainan serves Australia seasonally and its use of Virgin could be more radical, with an outcome of Virgin flying to mainland China and Hong Kong, accessing routes that Hainan's HNA Group (including Hong Kong Airlines) is unable to serve. Hainan already has an airline investment portfolio but Virgin would be its most significant. For China Southern, a Virgin stake could start state-owned Chinese airlines buying foreign airlines as they seek to be at the centre of most things in the world; including, one day, global consolidation.

This CAPA Premium Analysis article is 3,336 words.

To access CAPA Premium Analysis you need a CAPA Membership

Your window into the latest insights

CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.

Big picture strategic view

Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.

Global intelligence

The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.

Customise your Alerts

CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.

I'm very impressed by the factual and detailed analysis CAPA is always doing.

- CEO, Airline Member
To learn more, contact us:
Phone: +61 2 9241 3200 | Email: membership@centreforaviation.com