China Southern Airlines Freezes Deal With Kelon

23 July 2002

China Southern Airlines (NYSE: ZNH) (HKSE: 1055), the largest airline in The People's Republic of China has iced a strategic cooperation agreement with Kelon (HKSE: 0921), the largest refrigeration appliance manufacturer in China.

This new alliance with Kelon will be in the form of air ticketing, air cargo and the exchange of China Southern's Sky Pearl Club Frequent Flyer Sky Pearl Club mileage for merchandise in Kelon's product line.

All Kelon employees (and its forwarders) will be guided to China Southern Airlines as the refrigeration appliance manufacture's key air transportation supplier. All of Kelon's air cargo will be carried on China Southern Airlines.

China Southern Airlines employees and their family will also enjoy preferential fares when they purchase the Huabao Air Conditioner and Rongsheng Refrigerator, made by Kelon.

With more than 14,000 employees - including more than 2,000 engineers - and total assets of more than US$940 Million, Kelon is the first refrigeration enterprise in the PRC listed on both the Hong Kong (H share) and Mainland China (A share) exchanges. 

China Southern Airlines is the largest airline in The People's Republic of China.

The carrier offers the most extensive domestic flight network in China with direct flights to more than 80 cities - has more than 25% of China's domestic market share - and more than 50% of Guangzhou's air market share. 

The senior management team of China Southern realizes that it will not face the challenge of free-market competition by just selling airline tickets. 

China Southern is instead focused on earning and retaining customer loyalty.

With the rapid growth of China's middle class and facing the challenge of open market competition, airline customers need both marketing brands they can rely on and the personalized attention to detail that only China Southern Airlines can offer.

China Southern has quickly established its high yield customer strategy and is very motivated to exceed this type of customer's expectations.

China Southern Airlines is currently cooperating with China Post and China Mobile in the area of cargo, airline ticketing and customer services to (1) attract the first time customer; (2) retain that customer, and (3) retain that customer as a long-term frequent flyer. 

The largest airline in The People's Republic of China for the past 23 years, China Southern Airlines connects more than 80 cities around the globe. Major business and vacation destinations served in China include: Beijing, Chengdu, Guangzhou, Guilin, Hong Kong, Kunming, Shanghai, Shenzhen and Wuhan and as well as International service, including: Amsterdam, Bangkok, Fukuoka, Hanoi, Ho Chi Minh City, Kuala Lumpur, Jakarta, Los Angeles, Manila, Melbourne, Osaka, Penang, Phnom Penh, Seoul, Singapore, Sydney and Tokyo.