{"id":25284,"date":"2017-03-28T05:33:02","date_gmt":"2017-03-28T05:33:02","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=25284"},"modified":"2017-03-28T05:33:02","modified_gmt":"2017-03-28T05:33:02","slug":"american-airlines-takes-200-million-stake-in-china-southern","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/american-airlines-takes-200-million-stake-in-china-southern.html","title":{"rendered":"American Airlines takes $200 million stake in China Southern"},"content":{"rendered":"

\n\tAmerican Airlines takes $200 million stake in China Southern<\/span><\/strong><\/span>
\n<\/h2>\n

\n\tAmerican Airlines takes $200 million stake in China Southern:- China Southern Airlines Co Ltd (1055.HK)(600029.SS) said on Tuesday it would issue HK$1.55 billion ($199.6 million) worth of shares to a subsidiary of American Airlines Group Inc (AAL.O), giving the U.S. airline a stake in China's largest carrier.<\/span><\/span>\n<\/p>\n

\n\tThe deal would make American Airlines the second U.S. carrier to own part of a Chinese airline after Delta Air Lines Inc (DAL.N) bought 3.55 percent of China Eastern Airlines Corp 6000115.SS (0670.HK) for $450 million in 2015.<\/span><\/span>\n<\/p>\n

\n\tIt also means that China's three biggest airlines now all have tie-ups with foreign airlines, something Beijing has encouraged as a way to boost the sector's global competitiveness. Hong Kong's Cathay Pacific (0293.HK) and Chinese flag carrier Air China (601111.SS) (0753.HK) purchased a stake in each other in 2006.<\/span><\/span>\n<\/p>\n

\n\tIn a filing to the Hong Kong stock exchange, China Southern said it would issue 270.61 million Hong Kong-listed H-shares, representing 2.68 percent of the enlarged share capital of the airline. The shares would be issued at HK$5.74 apiece, or at a 4.6 percent premium to the previous close.<\/span><\/span>\n<\/p>\n

\n\t"It makes sense to partner with another foreign airline," said Daiwa Capital Markets analyst Kelvin Lau, citing Air China and China Eastern's deals.<\/span><\/span>\n<\/p>\n

\n\t"But … because the stakeholding is pretty small, I don't think it will make any material changes in terms of management."<\/span><\/span>\n<\/p>\n

\n\tThe carrier's mainland-listed shares, which resumed trading after a three-day suspension, jumped as much as 4.3 percent in early trading to their highest price in 7-1\/2 months.<\/span><\/span>\n<\/p>\n

\n\tIts Hong Kong-listed shares, which opened higher, were down 1.28 percent at 0256 GMT.<\/span><\/span>\n<\/p>\n

\n\tCOOPERATION PLANS<\/span><\/span>\n<\/p>\n

\n\tChina Southern is China's biggest airline in terms of passenger numbers. It is a member of the SkyTeam airline alliance and is based in the southern city of Guangzhou.<\/span><\/span>\n<\/p>\n

\n\tAmong other things, the deal would improve governance, strengthen management, boost competitiveness and help "achieve the strategic goal of building a world-class aviation industry group", the company's filing said.<\/span><\/span>\n<\/p>\n

\n\tIt said the two airlines may also increase cooperation in code-sharing and other areas, including staffing, sales, passenger loyalty programs and sharing airport facilities.<\/span><\/span>\n<\/p>\n

\n\tBeijing has vowed to shake up Chinese airlines by implementing mixed-ownership reforms and introducing private capital and strategic investment into its state-owned enterprises to improve efficiency and competitiveness.<\/span><\/span>\n<\/p>\n

\n\tChinese airlines have been aggressively expanding their fleet and international routes as they seek to capitalize on strong growth in outbound Chinese travel that has far outpaced tourism at home.<\/span><\/span>\n<\/p>\n

\n\tFor American Airlines, the deal could widen access to China, one of the biggest sources of tourists to the United States, and will help it compete with rival Delta, which has invested in foreign carriers in Mexico, Brazil and Britain in recent years.<\/span><\/span>\n<\/p>\n

\n\tSource:- http:\/\/www.reuters.com\/article\/us-csn-american-airline-sharesale-idUSKBN16Z035<\/span><\/span><\/p>\n

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