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Company News

28 June 2006

Skyteam Signs Agreement With China Southern, Confirming Airline's Commitment To Join The Alliance

Today SkyTeam signed the Global Airline Alliance Adherence Agreement with China Southern Airlines – the largest carrier of the People’s Republic of China, signifying that the aforesaid Chinese carrier has proceeded to the official procedure of the alliance membership. The agreement is a formal requirement of the membership procedure for a new member and determines the China Southern Airline’s obligations to comply with the severe standards and requirements imposed on the entrants and necessary to be satisfied to receive the official recognition as a SkyTeam member.

The signing ceremony took place at Southern Airlines Pearl Hotel, Guangzhou, and was attended by Liu Shao Yong – Chairman of China Southern Airlines board of directors, Yang Yuanyuan – Director of Civil Aviation Administration of China, as well as Yang Ho Cho – Chairman and General Director of Korean Air and other SkyTeam alliance representatives.

“China Southern Airlines made one more step forward to join SkyTeam”, - said Mr. Cho, - “While the company is moving forward to this goal, SkyTeam is trying to integrate the transportation services offered by this airline into the general airline network of the alliance. This will widen the range of SkyTeam’s services in China and other key regions, while including a conveniently located modern air traffic center in Guangzhou airport into the hub network of the alliance. SkyTeam passengers can reckon on widening of travel itinerary range in the region, where the air transportations are in great demand”.

China Southern Airlines will become an official member of SkyTeam as soon as it signs a bilateral code sharing agreement, a bonus program for frequent flyers and lounge agreements with each of the SkyTeam carriers and as soon as it satisfies all the membership requirements of the alliance. These events are expected in 2007.

“Signing the aforesaid agreement with SkyTeam is an important step forward for China Southern Airlines, as it confirms our intention to enter the alliance”, - said Mr. Liu Shao Yang, Chairman and President of Southern Airlines. “SkyTeam Membership will strengthen our competitiveness in the world market and enable us to provide our passengers with a second to none opportunity to choose itineraries of travel all over the world. As we move forward to the alliance membership, we strive for the further integration of forces with the alliance’s members”.

China Southern Airlines provides the largest itinerary network in China – consisting of more than 600 routes supported by 259 aircrafts – and a network in a number of foreign cities, which expands the current list of SkyTeam destination points, including Dalian, Changsha (China) and Melbourne (Australia).

For the period following the signing of the initial agreement in 2004 China Southern Airlines has been applying much effort to preparation for joining the alliance, and has been working with the alliance members to make progress in their bilateral cooperation.

At present five SkyTeam member airlines - Air France, Delta Air Lines, KLM Royal Dutch Airlines, Korean Air and Northwest Airlines – have established relationship with China Southern on freight and/or passenger transportations.

Air France, for example, which was the first to sign the code sharing agreement with China Southern Airlines in 2003, has become the first European airline carrying out flights to Guangzhou. A little bit later China Southern Airlines and KLM have started their cooperation in transportations according to new itineraries between Europe and China, including Chengdu-Amsterdam flight, which was launched last year. At present SkyTeam alliance members - Air France, Delta Air Lines, KLM Royal Dutch Airlines and Korean Air – have established relations with this airline on passenger and/or freight transportations.

The signing of the GAAAA marks an important step on the way to the alliance future, as this event has fallen within the period, when SkyTeam celebrates its sixth anniversary this month. The alliance has achieved great success in expansion of its itinerary network and development of the service strategy for the last year. The main achievements over this year include:

- Admission of Aeroflot to the alliance as a new member expanding the SkyTeam itinerary network in Central and Eastern Europe.

- Realization of SkyTeam Associate Program, initiated by the agreements with six Associated Airline candidates: Spanish Air Europa, Panamanian Copa, Kenya Airways, Lebanese Middle East Airlines, Portugalia Airlines and Romanian Tarom.

- Rendering of new services for organization of business trips, including SkyTeam Global Corporate Accounts and SkyTeam Global Meetings,

- Introduction of “Asia Pass” as a new fare product of SkyTeam services, and

- Becoming Global Traveller’s Best Airline Alliance 2005, selected by business and leisure travelers.

The alliance intends to maintain the tempo of growth in the following years.

About China Southern Airlines

The largest airline in the People’s Republic of China for the last 27 years, China Southern Airlines carries out the flights (see website - www.cs-air.com/en) to more than 142 cities all over the world. The main destination points for business and vacation trips within China: Peking, Chengdu, Guangzhou, Guilin, Hong-Kong, Lunming, Shanghai, Shenzhen, Wuhan, and also abroad: Amsterdam, Bangkok, Fukuoka, Hanoi, Ho Chi Minh, Istanbul, Kuala Lumpur, Jakarta, Los-Angeles, Manila, Melbourne, Moscow, Osaka, Paris, Penang, Pnompenh, Seoul, Singapore, Sydney and Tokyo.

About SkyTeam alliance

SkyTeam is the global airline alliance, affiliating with 10 partner airlines, namely: Aeroflot, Aeroméxico, Air France, Alitalia, Continental Airlines, Czech Airlines, Delta Air Lines, KLM Royal Dutch Airlines, Korean Air and Northwest Airlines. With its most extensive hub network in the world the Alliance offers to its 373 million passengers 15 thousand daily flights covering the itinerary network, which connects the main destination points all over the world. In 2005 «Global Traveler Magazine» readers generally recognized SkyTeam as “The best Airline Alliance”. Please visit the Alliance on the Web at: www.skyteam.com