Mixed Messages from China Southern

Slow, slow, quick, quick, slow for China Southern's future cargo alliance

As China Southern Airlines’ potential partners waltzthrough their joint-venture negotiations, what hadbeen a keen sense of anticipation among spectatorsis becoming somewhat jaded, if you’ll excuse the pun.Michael Westlake checks out who is leading who.

Germany’s Lufthansa, developmentbank DEG and Shenzhen Airlines havetheir Jade Cargo International jointventure up and running from Shenzhen,only about 30 miles away fromChina Southern’s massive Guangzhoubase.

China Southern’s two major competingmainland carriers, Air Chinaand China Eastern, both have separatecargo subsidiaries.

But a tie-up between China Southernand a foreign partner ¨C Air France-KLM has long been the heavily toutedfavourite ¨C has now been postponed.Officials at China Southern have beenquoted as saying that they had hopedto close negotiations by the end oflast year; now they hope to concludearrangements this year.

However, while China Southernchief financial officer Xu Jiebo saidin public that the foreign partner orpartners being sought would be fromthe SkyTeam grouping, he added thatAir France-KLM was not the only potentialtarget.

The base of the futurejoint venture is also indoubt ¨C either Guangzhou,with plenty of room forexpansion at its massiveand relatively new airportthere, or Shenzhen, goinghead-to-head with JadeCargo’s current three747-400 freighters (withthree more to come) andperhaps better positionedto attract some of the aircargo that now goes byroad to Hong Kong toconnect with internationalflights. China Southernexecutives contacted inconnection with this articledid not reply.