China Southern Airlines Company Limited provides commercial airline services throughout Mainland China, Hong Kong, Macau and Taiwan regions, Southeast Asia and other parts of the world.
The company conducts a portion of its airline operations through its airline subsidiaries, namely Xiamen Airlines, Shantou Airlines Company Limited (Shantou Airlines), Zhuhai Airlines Company Limited (Zhuhai Airlines), Guizhou Airlines Company Limited (Guizhou Airlines), Chongqing Airlines Company Limited (Chong...
China Southern Airlines Company Limited provides commercial airline services throughout Mainland China, Hong Kong, Macau and Taiwan regions, Southeast Asia and other parts of the world.
The company conducts a portion of its airline operations through its airline subsidiaries, namely Xiamen Airlines, Shantou Airlines Company Limited (Shantou Airlines), Zhuhai Airlines Company Limited (Zhuhai Airlines), Guizhou Airlines Company Limited (Guizhou Airlines), Chongqing Airlines Company Limited (Chongqing Airlines) and China Southern Airlines Henan Airlines Company Limited (Henan Airlines) (collectively, the Airline Subsidiaries), all incorporated in China.
The company also provides air cargo and mail services. The company’s airline operations, as well as air cargo and mail services, are fully integrated with its airline-related businesses, including aircraft maintenance, ground services and air catering operations.
The company’s operations primarily focus on the domestic market. In addition, the company operates regional routes and international flights. As of December 31, 2022, the company operated 1,327 routes, of which 1,223 were domestic, 94 were international and 10 were regional. The company operates the most extensive domestic route network among all Chinese airlines. The company’s route network covers commercial centers and rapidly developing economic regions in Mainland China. The company’s regional operations include flights between destinations in Mainland China, Hong Kong and Taiwan. The company’s international operations include scheduled services to cities in Australia, Bangladesh, Britain, Cambodia, Canada, Dutch, France, Germany, Indonesia, Italy, Japan, Kazakhstan, Kenya, Kyrgyzstan, Laos, Malaysia, Myanmar, Nepal, New Zealand, Pakistan, the Philippines, Russia, Singapore, South Korea, Thailand, Turkey, The United Arab Emirates, the United States, Uzbekistan and Vietnam.
The company’s Guangzhou hub has formed its route network featured with Europe and Oceania as its core, Southeast Asia, Southern Asia and Eastern Asia as its hinterlands, and with North America, Middle East and Africa covered. At the same time, the company has completed the relocation of all flights in Beijing Airport to Beijing Daxing Airport, with utilized time slots accounting for 45%, becoming the largest main base airline in Beijing Daxing Airport, thus providing favorable conditions and resources for the development of its new Beijing hub. By comprehensively advancing the strategic layout of the dual hubs, the company has further improved its institutional mechanisms and supporting resources to form a new development layout of CSA with Guangzhou Hub in the south and Beijing Hub in the north. In 2021, the company further advanced the hub network strategy, and accelerated the construction of two comprehensive international hubs in Guangzhou and Beijing. In 2022, the company continued to optimize its flight time slots at Beijing Daxing Airport and increase the number of flights departing from Beijing with a high contribution margin. The company’s market share at Beijing Daxing Airport reached 53.7% in 2022. The company also continued to enhance its market-leading position in the Guangdong-Hong Kong-Macao Greater Bay Area and proactively pursue new time slots. The company maintained a leading position in terms of market share for flights departing from Guangzhou, Shenzhen, Zhuhai and Huizhou.
The company’s corporate headquarters and principal base of operations are located in Guangzhou, the capital of Guangdong Province and the largest city in southern China. Located in the rapidly developing Pearl River Delta region, Guangzhou is also the transportation hub of southern China and one of China’s major gateway cities. Guangzhou’s significance has increased as the transportation infrastructure of Guangdong Province has developed through the construction and development of expressways, an extensive rail network and the port cities of Guangzhou, Shenzhen, Zhanjiang, Zhuhai and Shantou. In 2022, the company continued the construction integrating the Guangdong-Hong Kong-Macao Greater Bay Area, which drove the flow of people, logistics, information and capital in Guangdong Province and the entire Guangdong-Hong Kong-Macao Greater Bay Area, and enhanced the connectivity between the Guangdong-Hong Kong-Macao Greater Bay Area city cluster and major global city clusters.
As of December 31, 2022, the company had a fleet of 894 aircraft, consisting primarily of Boeing 737, 777, 787 series, Airbus 320, 330, 350, 380 series, EMB 190 series and ARJ 21 series. The average age of the company’s registered aircraft was 8.7 years as of December 31, 2022.
Route Network
The company operates the most extensive route network among all Chinese airlines. As of December 31, 2022, the company operated 1,327 routes consisting of 1,223 domestic routes, 10 regional routes and 94 international routes.
The company continually evaluates its network of domestic, regional and international routes in light of its operating profitability and efficiency. The company seeks to coordinate flight schedules with the Airline Subsidiaries on shared routes to maximize load factors and utilization rates. The operation of domestic, regional and international routes is subject to approval of the Civil Aviation Administration of China (CAAC), and the operation of regional and international routes is also subject to agreements between the Chinese government and the government of the Hong Kong SAR, the government of the Macau SAR, the government of Taiwan province and the government of the proposed foreign destination. Beginning in 2020, due to the COVID-19 pandemic and its negative impact on the air travel demand in domestic and international markets, as well as the various travel restrictions and border control measures implemented by government authorities of China and other countries, the company had to make certain adjustments to its routes, including temporarily suspending or reducing the number of flights on some routes. Both of its international and domestic routes were significantly affected in 2022 and have been gradually recovering since the beginning of 2023.
In order to expand its route network, the company has entered into code-sharing agreements with several international airlines, including Air France, American Airlines, Asiana Airlines, Inc., China Airlines/Mandarin Airlines, Czech Airlines, Delta Air Lines, Emirates, Etihad Airways, Finnair, ITA Airways, Japan Airlines, KLM Royal Dutch Airlines, Korean Air, Malaysia Airlines Berhad, Pakistan International Airlines, PT. Garuda Indonesia (Persero) Tbk., Qantas Airways Limited, Qatar Airways, Saudi Arabian Airlines, Vietnam Airlines and WestJet. Under the code-sharing agreements, the participating airlines are permitted to sell tickets on certain international routes operated by the company to passengers using their codes. Similarly, the company is permitted to sell tickets for the other participating airlines using the CZ code. The code-sharing agreements help increase the number of the company’s international sales outlets. The company continued the implementation of code-sharing during the reporting period.
Route Bases
In addition to its main route bases including Guangzhou and Beijing as core hubs, the company maintains regional route bases in Zhengzhou, Wuhan, Changsha, Shenzhen, Shenyang, Changchun, Dalian, Harbin, Haikou, Zhuhai, Shanghai, Xi’an, Nanning, Shantou, Guiyang, Urumqi, Chengdu, Kunming, Chongqing and Sanya. Most of its regional route bases are located in provincial capitals or major commercial centers in the PRC.
The company’s extensive network of route bases enables it to coordinate flights and deploy its aircraft more effectively and to provide more convenient connecting flight schedules and access service and maintenance facilities for its aircraft. The number and location of these route bases may enhance its ability to obtain the CAAC’s approval of requests by the company to open new routes and provide additional flights between these bases and other destinations in China. Regulations of the CAAC generally limit airlines to operations principally conducted from their respective route bases.
Domestic Routes
The company’s domestic routes network serves substantially all provinces and autonomous regions in China, including Guangdong, Fujian, Hubei, Hunan, Hainan, Guangxi, Guizhou, Henan, Heilongjiang, Jilin, Liaoning, Sichuan, Yunnan, Shannxi and Xinjiang and serves all four centrally-administered municipalities in China, namely, Beijing, Shanghai, Tianjin and Chongqing. In 2022, the company’s most frequent domestic routes were: Shanghai Hongqiao-Shenzhen, Guangzhou-Hangzhou, Guangzhou-Beijing Daxing, Guangzhou-Shanghai Hongqiao, Beijing Daxing-Shenzhen, Shenzhen-Hangzhou, Chengdu-Beijing Daxing, Guangzhou-Chengdu, Guangzhou-Kunming and Guangzhou-Nanjing.
Regional Routes
The company offers scheduled service between Hong Kong and Shenyang, Wuhan; and between Taipei and Shanghai. In 2022, the company conducted a total of 1,838 flights on its regional routes.
Previously, direct flights between Mainland China and Taiwan were only available during certain festivals. Other than that, travelers between Mainland China and Taiwan had to make use of intermediate stops in Hong Kong or elsewhere. As of December 31, 2022, only one route (Shanghai Pudong-Taipei) was retained.
International Routes
The company is the principal Chinese airline serving Southeast Asian destinations and Australasia, including Singapore and major cities in Australia, Bangladesh, Cambodia, Indonesia, Malaysia, New Zealand, the Philippines, Thailand and Vietnam.
The company’s international operations include scheduled services to cities in Australia, Bangladesh, Britain, Cambodia, Canada, Dutch, France, Germany, Indonesia, Italy, Japan, Kazakhstan, Kenya, Kyrgyzstan, Laos, Malaysia, Myanmar, Nepal, New Zealand, Pakistan, the Philippines, Russia, Singapore, South Korea, Thailand, Turkey, The United Arab Emirates, United States of American (USA), Uzbekistan and Vietnam.
In 2022, the company’s most frequent international routes were: Guangzhou-Auckland, Guangzhou-Los Angeles, Guangzhou-Sydney, Wuhan-Islamabad, Guangzhou-Tokyo, Guangzhou-Seoul, Shenzhen-Jakarta and Guangzhou-Seoul. Beginning in 2020, the company’s international operations were severely affected by the impact of the COVID-19 pandemic.
Aircraft Fleet
The company’s fleet plan in recent years emphasized expansion and modernization through the acquisition of new aircraft and the retirement of less efficient and old aircraft. As of December 31, 2022, the company operated a fleet of 894 aircraft with an average age of 8.7 years. The company has the largest fleet among Chinese airline companies.
In 2022, the company continued to expand and modernize its aircraft fleet. During 2022, the company took scheduled delivery of one B777F aircraft under purchase agreements; took scheduled delivery of 12 aircraft under finance lease, including four A350 aircraft and eight ARJ21-700 aircraft; took scheduled delivery of no aircraft under operating leases; returned one B-5113 aircraft under operating leases upon expiry; and disposed of two B747F aircrafts, three A380 aircraft and one B737-800 aircraft.
In 2022, Xiamen Airlines took scheduled delivery of one A321NEO aircraft under operating leases; took scheduled delivery of no aircraft under financing leases; and took scheduled delivery of no aircraft purchased with its own funds.
Aircraft Financing Arrangements
As of December 31, 2022, a significant portion of the company’s aircraft is acquired under long-term leases with remaining terms to maturity mainly ranging from one to twelve years. As of December 31, 2022, of the company’s 894 aircraft, 578 aircraft were operated under leases and 316 were either owned aircraft financed by long-term loans, or acquired either with cash or acquired by exercising the purchase options upon expiry of the relevant leases. The company’s planned acquisition of aircraft in the foreseeable future is generally expected to be made through acquisition financed by bank loans and its own funds or under lease arrangements. The company’s determination as to its acquisition strategy depends on its evaluation at the time of its capacity requirements, anticipated deliveries of aircraft, its capital structure and cash flow, prevailing interest rates and other general market conditions.
Aircraft Flight Equipment
The jet engines used in the company’s aircraft fleet are manufactured by General Electric Corporation, Rolls-Royce plc, United Technologies International, Inc., CFM International, Inc. International Aviation Engines Corporation and Honeywell International Inc. The company had 164 spare jet engines for its fleet as of December 31, 2022. The company determines its requirements for jet engines based on all relevant considerations, including manufacturers’ recommendations, the performance history of the jet engines and the planned utilization of its aircraft. Acquisition of rotables and certain of the expendables for its aircraft are generally handled by Southern Airlines (Group) Import and Export Trading Company Limited (SAIETC), a subsidiary the company acquired from CSAH in August 2016, in consideration of an agency fee. The company arranges the ordering of aircraft, jet engines and other flight equipment for the Airline Subsidiaries and keeps an inventory of rotables and expendables for the Airline Subsidiaries.
Aircraft Maintenance
A major part of the maintenance for the company’s fleet other than overhauls of jet engines is performed by Guangzhou Aircraft Maintenance Engineering Company Limited (GAMECO), an entity jointly controlled by the company, Hutchison Whampoa and South China International Aircraft Engineering Company Limited, consistent with its strategy to achieve fully integrated airline operations and to assure continued access to a stable source of high quality maintenance services. The remaining part of the maintenance for its fleet other than overhauls of jet engines is performed by service providers in China and overseas. GAMECO performs all types of maintenance services, ranging from maintenance inspections performed on aircraft (line maintenance services) to major overhaul performed at specified intervals. GAMECO was the first of three aircraft maintenance facilities in China that has been certified as a repair station by both the CAAC and the Federal Aviation Administration.
GAMECO performs major maintenance checks on the company’s aircraft within time periods generally consistent with those of large international airline maintenance centers. In 2022, 33.05% of the repair and maintenances including overhaul of the company were performed by GAMECO. Although rotables for the company’s aircraft are generally imported through SAIETC, a portion of expendables and other maintenance materials are directly imported by GAMECO. The company’s agreement with GAMECO usually has a term of one year.
Overhauls of jet engines are performed by MTU Maintenance Zhuhai Co., Ltd., or Zhuhai MTU, a jointly controlled entity of the company and MTU Aero Engines GmbH, and also by domestic qualified service providers in Xiamen (TEXL), Hong Kong (HAESL) and Taiwan (EGAT), Beijing (AMECO) and by overseas qualified service providers in the United States, Germany, Korea, Singapore, France, Malaysia, United Kingdom and Poland.
Safety
The company endeavors to maintain strict compliance with all laws and regulations applicable to flight safety. In addition, the company has adopted measures to eliminate or minimize factors that may impair flight safety, including specialized training programs and safety manuals. The Air Safety Management Department of the company implements safety-related training programs on an on-going basis in all of its operations to raise the safety awareness of all employees.
Jet Fuel
Like other Chinese airlines, the company generally purchases its jet fuel from regional branches of CAOSC and Bluesky Oil Supplies Company, except at Shenzhen, Sanya, Haikou and Shanghai Pudong, where jet fuel is supplied by a Sino-foreign joint venture in which CAOSC is a joint venture partner. CAOSC is a state-owned organization controlled and supervised by the CAAC that controls the importation and distribution of jet fuel throughout China.
In addition to purchases of jet fuel from CAOSC, the company purchases a portion of its jet fuel requirements for its international flights from foreign fuel suppliers located outside China at prevailing international market prices.
Flight Operations
Flight operations for the company’s flights originating in Guangzhou are managed by its flight operations and marketing divisions, which are responsible for formulating flight plans and schedules consistent with route and flight approvals received from the CAAC. The company’s flight operations center in Guangzhou is responsible for the on-site administration of flights, including the dispatch and coordination of flights, deployment of aircraft, ground services and crew staffing. In addition, each of the Airline Subsidiaries maintains flight operations centers at all servicing airports for on-site administration of their flights. The company’s system operations control (SOC) are responsible for monitoring conditions of its route network, administering its flight plans, collecting and monitoring navigation data and analyzing and monitoring airport conditions.
To enhance its management of flight operations, the company has launched and continued optimizing a new system to manage the whole flight operation process, covering flight plan production, aeronautical information processing, meteorological analysis, operation monitoring, flight deployment and other operational activities, which advanced its operation management in a more intelligent and digitalize way and improved its flight operation efficiency. The company also established and improved the backup system to enhance its risk-resistance ability.
Training of Pilots and Flight Attendants
As part of the pilot training program, trainee pilots receive their initial training in the operation of a specific aircraft with Zhuhai Xiang Yi Aviation Technology Company Limited (Zhuhai Xiang Yi), a wholly-owned subsidiary of the company, which also provides training to pilots from other Chinese airlines. Zhuhai Xiang Yi is equipped with simulators for the majority of models of aircraft operated by the company and provides flight simulation training services to it.
The company’s pilots are required to be licensed by the CAAC, which requires an annual proficiency check. The company’s pilots attend courses in simulator training twice annually and in emergency survival training once annually. The company also conducts regular advanced training courses for captains and captain candidates. Pilots advance in rank based on number of hours flown, types of aircraft flown and their performance history.
The company conducts theoretical and practical training programs for its flight attendants at its Flight Attendants Training Center in Guangzhou (the Guangzhou Training Center). The Guangzhou Training Center is equipped with computerized training equipment, as well as simulator cabins for all models of aircraft operated by the company. At the Guangzhou Training Center, the company’s flight attendants receive comprehensive training in in-flight service, emergency evacuation and water rescue.
Ground Services
The company makes arrangements with airport authorities, other airlines or ground services companies for substantially all ground facilities, including runway, ramp, terminal and support services buildings, at each airport that it serves. The company pays landing, parking and other fees to such airports, including Guangzhou Baiyun International Airport. At domestic airports, such fees are generally determined by CAAC.
At Guangzhou Baiyun International Airport, the company operates its own passenger check-in, cargo, mail and baggage handling, aircraft maintenance and cleaning services. The company also provides such services to its customer airlines that operate in Guangzhou Baiyun International Airport.
Ground services at the airports, such as those in Shenzhen, Changsha, Wuhan, Zhengzhou, Haikou, Zhuhai, Xiamen, Jieyang, Guiyang, Shenyang, Harbin, Dalian, Changchun, Sanya, Nanning, Chongqing, Shanghai Hongqiao, Shanghai Pudong and Urumqi, are operated directly by the Group. Ground services at the airport in Beijing have been primarily provided by Beijing China Southern Airlines Ground Services Co., Ltd, which became a wholly-owned subsidiary of the company in June 2009. Ground services at other airports in China are provided to the company by local airport authorities or local airlines in accordance with relevant service agreements. Ground services and other services at airports outside China are provided to the company by foreign services providers in accordance with relevant service agreements with such parties. All the company’s such agreements are short-term and otherwise on customary terms in the industry.
Air Catering
The company owns a 70.5% equity interest in Guangzhou Nanland Air Catering Company Limited (Nanland). Nanland provides in-flight meals, snacks, drinks and related services for all of the company’s flights originating from airports around China. The company also contracts with various air catering suppliers with respect to in-flight catering services for flights originating from other airports, generally on an annual basis and otherwise on customary terms in the industry.
Cargo and Mail
The company also provides air cargo and mail services. A significant portion of these services are combined with passenger flights services. In 2022, the company had 15 Boeing 777 freighters, mainly servicing 19 international cargo routes with an average of 61 flights in total per week, including:
Guangzhou - Chongqing - Amsterdam - Guangzhou, Guangzhou - Amsterdam - Guangzhou, Guangzhou - London - Frankfurt - Guangzhou, Guangzhou - London -Guangzhou, Guangzhou - London - Shenzhen, Guangzhou - Chongqing - Frankfurt - Guangzhou, Guangzhou - Frankfurt - Guangzhou, Guangzhou - Anchorage - LosAngeles - Guangzhou, Guangzhou - HoChiMinhCity - Hanoi - Guangzhou, ShanghaiPudong - Amsterdam - Chongqing - ShanghaiPudong, ShanghaiPudong - Amsterdam - ShanghaiPudong, ShanghaiPudong - Frankfurt - ShanghaiPudong, ShanghaiPudong - Anchorage - Chicago - ShanghaiPudong, ShanghaiPudong - Anchorage - Chicago - Shenzhen, ShanghaiPudong - LosAngeles - ShanghaiPudong, Shenzhen - Frankfurt - Shenzhen, Shenzhen-Frankfurt -Guangzhou, Shenzhen - Frankfurt - ShanghaiPudong and Shenzhen - Anchorage - Chicago - Shenzhen.
In 2022, the company continued to take active measures to increase freight revenue, including improving the utilization rate of freighters, and organized 9,098 flight shifts by freighters converted from passenger aircraft, and achieved positive operating results. The company conducts its cargo business primarily through its cargo hubs in Guangzhou and Shanghai.
Sales, Reservations and Marketing
Passenger Ticket Sales and Reservations
The company’s ticket sales and reservations are conducted by or through independent sales agents and its own network of exclusive sales offices, as well as the CAAC’s sales offices and CSAH’s affiliates. The company has sales offices in Guangzhou and its other route bases. In addition, the company maintains regional sales offices in other cities in China, including Beijing and Shanghai. The company maintains international sales offices in many cities in all continents except for South America, including but not limited to Almaty, Amsterdam, Auckland, Bangkok, Busan, Chicago, Dubai (Sharjah), Frankfurt, Hanoi, Ho Chi Minh City, Islamabad, Istanbul, Kuala Lumpur, London, Los Angeles, Manila, Mexico City, Moscow, New York, Nairobi, Paris, Roma, Seoul, Singapore, Sydney, Toronto, Tokyo, Vancouver and Vientiane.
The company has agency agreements with airlines in the Asia-Pacific region, Europe, the United States and Africa for the processing of ticket sales and reservations on a reciprocal basis. In 2022, over 55% of all ticket sales for the company’s scheduled flights were made by its network of sales offices and CSAH’s affiliates. The company also sells tickets and accept reservations through an extensive network of non-exclusive independent sales agents. Under the agency agreements with these sales agents, the company pays commissions based on the value of tickets sold. In 2022, sales by independent sales agents accounted for less than 45% of the company’s ticket sales of its scheduled flights.
Substantially all of the company’s sales offices and agents in China are linked electronically to the TravelSky Technology Limited’s computerized ticketing and reservations system, which is in turn linked to all domestic airlines for flights throughout China. The company has also entered into membership agreements with several international reservation systems, including ABACUS in Southeast Asia, SABRE and GALILEO in the United States, AMADEUS in Europe and INFINI in Japan. These systems facilitate reservations and sales of tickets for the company’s international flights. The company has launched the China Southern e Travel strategy, which aims to explore the needs of passengers and plan and design products from the perspective of passengers. The company has built a number of quality products such as flight dynamics, seat selection and check-in, electronic invoices, face recognition, full-channel self-service refund and meal service. The company’s vision of a hassle-free journey with one mobile device has become a reality in technology, and the digitalization of the entire process of passenger travel has been realized. In 2018, the company released the Internet + strategy centering on China Southern e Travel, and formally built a one-stop service mobile application platform to provide passengers with excellent door-to-door service experience.
Cargo
The company’s cargo and mail services are promoted through its own cargo divisions and independent cargo agents both within and outside China that track available space among all airlines. In particular, the company employs a number of cargo agents in the Pearl River Delta region.
Promotional and Marketing Activities
The company engages in regular promotional and marketing activities. The company’s promotional and marketing activities for domestic routes emphasize safety, passenger comfort and the frequency of its flights. The company’s promotional and marketing activities with respect to international and regional passengers emphasize its quality of service, extensive route network in China and higher frequency of flights compared to other Chinese airlines. The company is among the first in China to launch premium economy class seats. In addition, the company promotes and markets its regional and international routes on the basis of price competitiveness.
The company seeks to increase its brand recognition by offering new services to passengers. For example, the company was the first Chinese airline to provide off-airport check-in services. The company also offers transfer and baggage through-handling services to passengers connecting to other airlines, including passengers connecting in Hong Kong for flights to Taiwan. The company has widened its use of information technology and introduced new services, such as cell phone check-in, SMS platforms and online meal booking. In 2017, the company reached a strategic cooperation agreement with American Airlines.
As an important strategic decision, the company officially exited from SkyTeam Alliance from January 1, 2020 and focused on establishing cooperation with new strategic partners, while maintaining good relationships with the SkyTeam partners. The company had a Strategic Cooperation Agreement with American Airlines since 2017 and implemented full scope codeshare cooperation, Frequent Flyer Programs cooperation and lounge services since 2019. The company has also entered into a Joint Business Agreement with British Airways and implemented enhanced codeshare cooperation in 2019. Although no longer a member of SkyTeam, CZ continues the codeshare cooperation with SkyTeam partners, including AirFrance-KLM, and other important joint business partners. The company will continue to properly carry out the work of exit and fully guarantee the rights and interests of passengers. The company will carry out bilateral and multilateral cooperation in a more targeted manner while deepening the cooperation with the existing partners, such as France Airlines and KLM Royal Dutch Airlines, expand code sharing and frequent passenger cooperation with American Airlines, and launch strategic cooperation with numbers of internationally renowned airlines, such as Finnair and Emirates to provide passengers with more convenient and high-quality travel options. At the same time, the company continues to strengthen the coordinated development of the China Southern Alliance by gradually integrating with Xiamen Airlines and Sichuan Airlines in terms of capacity layout, route cooperation, resource sharing and customer collaboration. As of December 31, 2022, the company share codes with 21 international and regional airlines in 258 routes (including trunk routes and beyond routes). These arrangements enlarge the company’s sales channels and flight route network.
Competition
Domestic Routes: The company competes against other major Chinese airlines in its various domestic route markets. Of these competitors, the largest two are Air China and China Eastern Airlines, which are owned or controlled by the Chinese government. The company also faces competition from other airlines which are not state-owned such as Spring Airlines and Jixiang Airlines.
Regional Routes: Air China, China Eastern Airlines, Air Macau, Cathay Pacific, China Airlines and Eva Airways compete with the company in the regional traffic markets.
International Routes: In Southeast Asian routes, the company’s competitors mainly include Thai Airways International, Singapore Airlines, Malaysian Airlines System, Vietnam Airlines, Garuda Indonesia, Philippine Airlines, Air China and China Eastern Airlines. In European routes, the company’s competitors mainly include Air China, China Eastern Airlines, Cathay Pacific, Lufthansa German Airlines. In the United States routes, the company’s competitors mainly include Air China, China Eastern Airlines, Cathay Pacific and United Airlines. In Australian routes, the company’s competitors include Air China, China Eastern Airlines, Cathay Pacific and Qantas Airways.
Airline Subsidiaries
The company’s Airline Subsidiaries are joint ventures established by the company and local companies in the provinces or special economic zones where its Airline Subsidiaries are based and are engaged in providing airline and related services. As of December 31, 2022, the company owned a 55% or 60% equity interest in each of its Airline Subsidiaries.
As of December 31, 2022, Xiamen Airlines operated under the MF code with a fleet of 209 aircraft. In 2022, Xiamen Airlines carried a total of about 18.12 million passengers, or approximately 28.9% of the passengers carried by the company in that year.
As of December 31, 2022, Shantou Airlines operated under CZ code with a fleet of 16 aircraft. In 2022, under the centralized allocation of flight routes of the company’s Group, Shantou Airlines carried a total of about 1.53 million passengers.
As of December 31, 2022, Zhuhai Airlines operated under the CZ code with a fleet of 16 aircraft. In 2022, under the centralized allocation of flight routes of the company, Zhuhai Airlines carried a total of about 1.27 million passengers, or approximately 2.0% of the total number of passengers carried by the company in that year.
As of December 31, 2022, Guizhou Airlines operated under the CZ code with a fleet of 20 aircraft. In 2022, under the centralized allocation of flight routes of the company, Guizhou Airlines carried a total of about 1.81 million passengers, or approximately 2.9% of the total number of passengers carried by the company in that year.
As of December 31, 2022, Chongqing Airlines operated under the OQ code with a fleet of 30 aircraft. In 2022, under the centralized allocation of flight routes of the company, Chongqing Airlines carried a total of about 2.56 million passengers, or 4.1% of the total number of passengers carried by the company in that year.
As of December 31, 2022, Henan Airlines operated under the CZ code with a fleet of 30 aircraft. In 2022, under the centralized allocation of flight routes of the company, Henan Airlines carried a total of about 2.20 million passengers, or approximately 3.5% of the total number of passengers carried by the company in that year.
Southern Air Logistic Subsidiary
China Southern Air Logistics Co., Ltd., or Logistics Company mainly conducts logistics operations. On November 30, 2022, Logistics Company submitted an application to the Guangdong Regulatory Bureau of the CSRC for pre-listing tutoring for its planned listing on a stock exchange in the PRC.
Intellectual Property
The company’s businesses and operations, other than the businesses and operations of Xiamen Airlines and Chongqing Airlines, are conducted under the names China Southern and China Southern Airlines in both English and Chinese. The company uses a stylized rendition of a kapok plant as its logo. Xiamen Airlines conducts its businesses and operations under the name of Xiamen Airlines in English and Chinese and uses its own logo depicting a stylized rendition of an egret. Chongqing Airlines conducts its business and operations under the name of Chongqing Airlines in English and Chinese and uses its own logo depicting a cross of two rivers.
The company owns various trademarks and trade names related to its business. The names China Southern and China Southern Airlines contain Chinese words of common usage and are therefore not eligible for registration as trade names under current Chinese law. The kapok logo is a trademark registered in China and recorded with the International Air Transport Association (IATA), the rights to which are owned by CSAH. The company and CSAH have entered into a trademark license agreement (the Trademark License Agreement), pursuant to which CSAH has licensed to the company the right to use the names China Southern and China Southern Airlines in both English and Chinese and granted the company a ten-year renewable license from 1997 to use the kapok logo on a world-wide basis. CSAH has retained the right to use the kapok logo in connection with its non-airline related businesses conducted as of the date of the Trademark License Agreement and to permit its affiliates that do not compete, directly or indirectly, with the company to use the kapok logo. Unless CSAH gives a written notice of termination three months before the expiration of the agreement, the agreement will be automatically renewed for another ten-year term. In May of 2017, the Trademark License Agreement was automatically renewed by the two parties for another ten-year term ending 2027. Xiamen Airlines owns all rights to its egret logo, which is a trademark registered in China, and recorded with the IATA. Chongqing Airlines also owns all rights to its logo, which is a trademark registered in China, and recorded with the IATA.
Regulations
As an airline providing services on international routes, the company is subject to a variety of bilateral civil air transport agreements that provide for the exchange of air traffic rights between China and various other countries. In addition, China is a contracting state, as well as a permanent member, of the International Civil Aviation Organization (the ICAO), an agency of the United Nations established in 1947 to assist in the planning and development of international air transport, and is a party to many other international aviation conventions. The ICAO establishes technical standards for the international aviation industry.
History
China Southern Airlines Company Limited was founded in 1995. The company was incorporated under PRC laws in 1995 as a joint stock company with limited liability.
