Star Alliance will enhance its position in China, particularly in the fast-growing Pearl River Delta region, by adding Shenzhen Airlines as its second Chinese member. Only two Star members currently serve Shenzhen but the city is the fifth largest in China and is strategically located between Hong Kong and Guangzhou in the Pearl River Delta.
Star announced on 06-Jul-2011 that its board had approved Shenzhen Airlines as a future member. The carrier expects to formally join the alliance in late 2012.
Star currently only has one Chinese member in Air China, which owns 51% of Shenzhen Airlines and is sponsoring Shenzhen Airlines’ membership in the alliance. Star had two Chinese members until Oct-2010, when Shanghai Airlines left the alliance. Shanghai Airlines and its new owner, China Eastern Airlines, joined rival SkyTeam in Jun-2011.
See related report: Before and After: The impact of China Eastern and Shanghai Airlines joining SkyTeam
Adding Shenzhen Airlines will give back the market share in China that Star lost when Shanghai Airlines left the alliance. But Star will still be smaller in China than SkyTeam, which also has China Southern Airlines as a member. SkyTeam also approved in Jun-2011 Xiamen Airlines, another subsidiary of China Southern Airlines, as a future member.
While SkyTeam seems for now to have edged out Star as the leading alliance in China there are still several unaligned Chinese carriers. Star Alliance CEO Jaan Albrecht says Star continues to seek opportunities to further grow its membership in China. “This market is incredible,” Mr Albrecht said on the sidelines of the ceremony celebrating Shenzhen Airlines as a future member. “We are looking for opportunities to expand our footprint in China.”
Star Alliance will command a 26.5% capacity share to/from/within China after Shenzhen Airlines joins the grouping (up from 21.0%), while SkyTeam will consolidate its position as the leading alliance in China, from 37.5% capacity share currently to 44.3% after Xiamen Airlines joins.
NB: The 'Before' and 'After' charts below show capacity shares to/from/within China now (Jul-2011) and after Shenzhen joins Star and Xiamen Airlines joins SkyTeam next year, based on current capacity levels and assuming no other changes in alliances. The colours of the graphs below default to blue for the largest carrier, yellow for second largest, green for third, red for fourth and blue for fifth.
Source:Centre for Asia Pacific Aviation