MIDAS Aviation Blog 

One In, One Out, oneworld!


There’ll be huge relief at the Corporate Offices of oneworld this week in New York as the marketing and design teams realise there will be no need to redesign marketing material and web layouts. A simple “one in, one out” change of logo will save weeks of work if the probable departure of Qatar Airways can simply be replaced by the arrival of China Southern. Relief all round then, but what does it all mean?

Qatar Airways long-term participation in any relationship would always be difficult. Parallels with “it’s my ball and I’m going home” could describe the management style in the airline, hardly fitting comfortably with the concept of what an alliance means.  

Qatar’s contribution to the oneworld network amounts to 6.8% of the alliance capacity and ranks them 5thamongst the members. While Qatar added a boutique feel to the oneworld position from a brand and product perspective, in reality its network can be covered by a combination of other alliance members. 

China Southern, on the other hand, is an entirely different proposition; more of a Walmart in many ways. Ranking second in the current SkyTeam stable, ahead of China Eastern, with 13.8% of the alliance capacity this potential transfer would be a scoop bigger than Harry Kane joining Inverness Caledonian Thistle! 

For oneworld, acquiring China Southern fills a huge gap in their global network. China is, after all, the fastest growing market and soon to be largest market in the world: it has been becoming harder for oneworld to defend not having a Chinese partner. China Southern are the market leader in the Chinese domestic market with close to one in six seats operated by them, and will make a considerable difference to the position of the oneworld alliance from any perspective. As the “before and after” charts below show, suddenly oneworld looks all of one percentage point stronger in terms of global capacity share but - more importantly - grabs a foothold in what will be the largest market in the world.  

Chart 1- Current Alliance Capacity Shares 2018

Chart 1- Current Alliance Capacity Shares 2018

Chart 2- Current Alliance Capacity Shares 2018 Assuming Member Changes

Chart 2- Current Alliance Capacity Shares 2018 Assuming Member Changes

Aside from the airline and alliance strategies this potential development would “tidy up” some of the inconsistencies in various Chinese airline partnerships as part of the wider evolution of China’s aviation market. With the new Beijing Daxing International Airport opening, Guangzhou’s rapid development and the larger Greater Bay Battle there is much to play for in the next few years. 

More importantly though, such a development keeps the oneworld alliance membership stable, gives them a Chinese partner and saves a lots of design work! That’s probably cause for a celebration; anyone for a Chinese takeaway then?

-John Grant

MIDAS Aviation