China Southern Airlines Company Limited (simplified Chinese: 中国南方航空公司; traditional Chinese: 中國南方航空公司) (SSE: 600029, SEHK: 1055, NYSE: ZNH) is an airline headquartered in Baiyun District, Guangzhou, Guangdong Province, People's Republic of China. It is the world's sixth-largest airline measured by passengers carried and Asia's largest airline in fleet size and passengers carried.[citation needed] It is the fourth-largest airline in the world in domestic passenger traffic and the sixth-largest in scheduled domestic passenger-kilometres flown. From its main hubs at Beijing Capital International Airport and Guangzhou Baiyun International Airport, the airline flies to 193 destinations using a fleet of more than 400 aircraft.
China Southern Airlines was established on 1 July 1988 following the restructuring of the Civil Aviation Administration of China. Since then, it acquired and merged with a number of domestic airlines, becoming one of China's "Big Three" airlines (alongside Air China and China Eastern Airlines). China Southern Airlines is a member of SkyTeam. The airlines's logo is a red kapok on a blue vertical tail fin.
In 2012, China Southern Airlines carried 86.5 million domestic and international passengers with an average load factor of 81%.
China Southern Airlines Airbus A321 at New Chitose Airport in Sapporo, Japan
China Southern Airlines was established in 1988, following the government's decision to split the operating divisions of Civil Aviation Administration of China (CAAC) into separate airlines. The CAAC was restructured in late 1984 and divided into four major airlines, among which was China Southern Airlines, which became a separate identity on 1 July 1988. with operations starting in 1989. Although controlled by the CAAC, China Southern quickly established relationships with Western companies; in 1990, it launched a maintenance joint-venture with Hong Kong-based Hutchison Whampoa and Lockheed called Guangzhou Aircraft Maintenance Engineering Co. (GAMECO). During 1991, 6 million passengers were carried, and with 38 Boeing jet airliners, China Southern was serving 90 domestic cities and 17 international destinations. In 1992, the airline raised US$537 million in revenue and posted a $102 million profits; on 17 December 1992, China Southern signed an order for six Boeing 777s, split between four standard −200 series and two longer-range −200ERs. China Southern, with a number of Chinese airlines, was granted financial independence during the year, with a resultant drawback being the purchase of fuel and airport fees.
Foreign investments
In 1994, the Chinese government opened the possibility foreign investments in its airlines; China Southern and United Airlines quickly started talks on the matter. To raise its operating standards and distance itself from mostly unprofitable second- and third-tiers domestic airlines, the carrier signed agreements with a number of U.S. carriers regarding staff training and aircraft maintenance, with the ultimate aim of being listed on the New York Stock Exchange. Revenue for the year doubled, although profits did not increase significantly due to the costs associated with the airline's growth.
The first of the six Boeing 777s arrived on 28 December 1995. Its first long-haul route, Guangzhou–Beijing–Amsterdam, was launched in 1996. The following year, China Southern was the first to place its Boeing 777s into non-stop services across the Pacific Ocean, connecting Guangzhou and Los Angeles. Three years later, Boeing 777's were deployed to Sydney and Melbourne. Despite the airline's effort on raising international capacity from the start, domestic traffic made up 80% of the airline's revenue. As a result, it signed a codeshare agreement during the mid-1990s to further increase international traffic.
In order to keep pace with fast developments, China Southern Airlines entered the capital market to optimise its financial structure. The airline successfully listed on the Hong Kong and New York Stock Exchanges in July 1997, raising $600–$700 million. It followed up in 2003 at the Shanghai Stock Exchange.
Mergers and acquisitions
In July 2000, the CAAC announced that the ten airlines under its direct management will be merged into three airline groups, revolving around Air China, China Eastern Airlines and China Southern itself. On 4 August, China Southern absorbed Zhongyuan Airlines. The following year it acquired China Northern Airlines and China Xinjiang Airlines. In 2004, the merger was completed. As a result, China Southern Airlines became one of the "Big Three" carriers in the country. Since then, it has successively taken over shareholding stocks and joined the equity in numerous Chinese carriers. The airline is the major shareholder of Xiamen Airlines (51%) and Chongqing Airlines (60%). It also invests in Sichuan Airlines.
On 29 September 2003, the airline placed an order with Airbus for 4 Trent 700-powered Airbus A330-200s, to be delivered from 2005. This was part of the order placed in April by the China Aviation Supplies Imp. & Exp. Group covering 30 aircraft. The first example was delivered on 28 February 2005, thereby giving China Southern the title of the first mainland Chinese A330 operator. One month earlier, on 28 January 2005, the airline placed a commitment order for 5 Airbus A380-800s, becoming the first Chinese airline to so, with delivery in time for the 2008 Summer Olympics. Ironically, PRC officials also placed an order for 60 7E7s on the same day for six airlines. The aircraft would be delivered between 2008 and 2010. However, due to delivery delays, the aircraft was not delivered in time for the Olympics and as of May 2010, the first of the aircraft are scheduled to arrive sometime in 2011. Boeing used the event to officially designate the aircraft the Boeing 787.
On the same day, a China Southern Airlines Boeing 777–200 originating from Guangzhou Baiyun International Airport landed in Taipei, becoming the first mainland Chinese aircraft to land in the Republic of China since 1949, when the Kuomintang were involved in the war with the Communist Party of China. The flight carried 234 passengers home after the Lunar New Year. Within three years, in July 2008, a China Southern Airlines Airbus A330 carrying 230 tourists again landed in Taipei. The governments of the two countries agreed to allow direct flights between the countries in June, ending six decades of limited air travel between the two sides. Following the flight, China Southern Airlines Chairman and pilot of the flight, Liu Shaoyong, said, "From today onward, regular commercial flights will replace the rumbling warplanes over the skies of the Taiwan Strait, and relations between the two sides will become better and better. "
On 6 September 2005, China Southern Airlines along with CASGC placed an order for a further 10 Airbus A330 wide-body airliners: 8 A330-300s and 2 A330-200s. Aircraft deliveries were due to begin in December 2007 and continue through 2008. It followed up with another Airbus order on 7 July 2006, when it confirmed a deal covering the purchase of 50 more A320 narrowbodies for delivery from 2009. The order included 13 A319-100s, 20 A320-200s and 17 A321-200s, reportedly worth $3.3 billion at list price. In December 2005, China Southern Airlines along with CASGC, announced an order with Boeing for 9 Boeing 737-700s and 11 Boeing 737-800s.
In June 2006, China Southern Airlines confirmed another order of 3 Boeing 737-700s and 7 Boeing 737-800s. The deliveries would continue through 2010. On 18 October 2006, China Southern Airlines placed an order for 6 Boeing 777 freighters, striding forward a brand new step in its cargo development. The aircraft would be delivered from November 2008 to July 2010.
On 20 August 2007, China Southern Airlines announced its intention for an order of 25 Boeing 737-700s and 30 Boeing 737-800s, which will be delivered from May 2011 to October 2013. It was a mere two months before, on 23 October 2007, China Southern Airlines announced that it had placed an order for 10 additional Airbus A330-200s. The order has a listed price of US$1.677 billion and the aircraft will be delivered from March 2010 to August 2012.
Recent developments
During 2009, China Southern Airlines remodeled its strategy from a point to point hub to a full hub and spoke carrier, which has been proven successful. Along with that, the airline has rapidly expanded its international market share, particularly in Australia, where passenger numbers in 2011 have been 97% greater than in 2010.
On 21 January 2010, China Southern Airlines announced an order for an additional 20 A320-200s, scheduled for delivery from 2011, due to the falling fuel costs and surging passenger demand.
In March 2010, the Chinese carrier issued new shares in Hong Kong and Shanghai 2010 to raise 10.75 billion yuan[28] ($1.57 billion) in a bid to pay off outstanding loans. In December, CNY810 million ($121.5 million) was injected by China Southern Airlines into its subsidiary Xiamen Airlines to fund its fleet expansion.
In November 2010, China Southern Airlines signed an agreement with Airbus for the purchase of six A330s and 30 A320s–200.
On 11 January 2011, China Southern Airlines announced a lease for 10 Embraer E-190, set to be delivered from the second half of 2011.
On 27 January 2011, China Southern Airlines was awarded the four star ranking by Skytrax. It is the largest four-star airline to hold this title.
On 15 June 2011, China Southern Airlines made its inaugural flight to Vancouver, Canada opening up a new passenger and trade routes including China Southern Cargo's first flight on 5 July 2011.
On 17 October 2011, China Southern Airlines made its first flight with the Airbus A380.
On 6 June 2012, China Southern Airlines inaugurated its first flight from Guangzhou to London-Heathrow, also known as the "Canton Route". The opening frequency is reported to be three times weekly. China Southern Airlines launched as part of its aggressive expansion in Australia, as well as to compete in the kangaroo route along with other carriers Qantas, Singapore Airlines, Emirates, and Malaysia Airlines.
During May–June 2012, China Southern Airlines has recruited Dutch flight attendants to serve the First and Business class sections for flights from Guangzhou to Amsterdam.
On 7 June 2013, China Southern Airlines began operating its first Boeing 787.
Shortly after the disappearance and crash of Malaysia Airlines Flight 370, China Southern revealed that seven of the passengers had bought tickets on the flight via its codeshare agreement with Malaysia Airlines. Two of those passengers have been confirmed to have been traveling with stolen passports.
In early 2015 it was announced that the airline would lease 24 Airbus A320neo aircraft from AerCap for delivery between 2016 and 2019.
Corporate affairs
China Southern Airlines Headquarters in Guangzhou
China Southern is headquartered in Baiyun District, Guangzhou, Guangdong Province, People's Republic of China.
China Southern plans to open a new headquarters facility on a 988-acre (400 ha) site on the outskirts of Guangzhou, about 4 miles (6.4 km) from Guangzhou Baiyun International Airport. Woods Bagot won a competition for the architect firm which would design the facility. The proposed site consists of two parcels of land on opposite sides of a highway leading to Baiyun Airport; both sites are shaped like wings. The site will have a bridge and light rail system that operates above the highway to connect the two parcels, which will each have distinct functions. For instance, the east parcel will house internal functions such as the data center facilities, staff dormitories, and the training center. The airline wants it to be aesthetically pleasing from the air since it sits below a runway approach. The site will have a lot of outdoor space, which Woods Bagot designed along with Hargreaves Associates and Sherwood Design Engineers. Jean Weng, a Woods Bagot Beijing-based principal, said "Most Chinese cities are very dense and very urban, but China Southern wants to create a human-scale campus, that’s close to nature."
Destinations
Main article: China Southern Airlines destinations
China Southern Airlines Airbus A330-200 on short final to Amsterdam Airport Schiphol in 2011
China Southern Airlines serves 193 destinations in 35 different countries worldwide. It maintains a strong presence in the domestic market with its main hubs at Beijing Capital International Airport, Guangzhou Baiyun International Airport, Chongqing Jiangbei International Airport, and Ürümqi Diwopu International Airport, along with other focus cities in Changchun, Changsha, Dalian, Shanghai, Shenyang, Shenzhen, Wuhan and Zhengzhou. The airline plans to continue to develop Chongqing and Ürümqi as hubs as well to exploit the domestic market potential.
China Southern currently offers 485 flights a day from its Guangzhou hub and 221 from its Beijing hub. The airline provides services to 65 international destinations. Most of the international flights link Guangzhou with world cities. There are also plenty of international flights operated through Beijing, Ürümqi (notably to Central Asia) and Dalian (to Japan, South Korea, and Russia). China Southern Airlines has developed an extensive network to Southeast Asia and also has become the Chinese airline with the largest presence in Australia. China Southern is also considering expanding into the South American markets, as well as further expansion into the African market
