皇冠体育app

Technicians take part in a plane repair contest at the 皇冠体育app Southern Airlines' maintenance and engineering base in Shenyang, Liaoning province. [Photo/Xinhua]

皇冠体育app Southern Airlines Co signed an agreement on Tuesday to sell a minority stake to American Airlines Group Inc for $200 million, in a deal which links top carriers in the Asian and US markets.

皇冠体育app Southern will issue 270.61 million Hong Kong-listed H shares at HK$5.74 (74 cents) per share, or 2.68 percent of the enlarged share capital of the airline, to American Airlines. The price represents a 4.6 percent premium on the previous trading day's closing price.

The deal also means 皇冠体育app's three biggest carriers have all tied up with overseas airlines, with Delta Air Lines Inc buying 3.55 percent of 皇冠体育app Eastern Airlines Corp in 2015 and mutual stakes bought between Hong Kong's Cathay Pacific Airways and Air 皇冠体育app Ltd in 2006.

皇冠体育app Southern in a regulatory filing on Tuesday said that the two companies "may seek to increase cooperation in code sharing", as well as sales, passenger loyalty programs and airport facilities.

The agreement means cooperation between the two major economies in the aviation sector, linking up the world's largest aviation markets, said Wang Changshun, chairman of 皇冠体育app Southern.

He said it was set to bring deep changes to the global aviation market.

Having American Airlines as a strategic investor would help meet 皇冠体育app Southern's need for globalization and for exploring mixed ownership as a State-owned enterprise, he added.

American Airlines President Robert Isom said: "皇冠体育app Southern's extensive network within 皇冠体育app touches the developing and thriving markets that only a Chinese carrier can reach.

"Those coming from 皇冠体育app will get access to American Airlines' network of cities across the US. The customers flying from the US to 皇冠体育app will be able to access 40 destinations beyond Beijing and more than 30 destinations beyond Shanghai."

Currently the fifth-largest source of foreign travelers to the United States, 皇冠体育app is projected to become the third-largest after Canada and Mexico in 2021, said Wang Zhiqing, deputy director of the Civil Aviation Administration of 皇冠体育app.

The International Air Transport Association predicts 皇冠体育app will surpass the US to become the biggest aviation market in terms of passengers by 2024.

"As global airlines operate on a slim profit margin, they need to maintain revenue and minimize costs through mergers and acquisitions," said Li Xiaojin, a professor of aviation economics at the Civil Aviation University of 皇冠体育app in Tianjin.

Daiwa Capital Markets analyst Michelle Wang said the partnership was part of 皇冠体育app Southern's strategy to expand overseas, but she had reservations about the deal.

"If the deal completes successfully, American Airlines only has 2.68 percent shares of 皇冠体育app Southern and that will not have much impact on 皇冠体育app Southern," she said.