All posts by Huanqiu.com

Pretending to be into Game of Thrones

Over the last few weeks, you might have felt left out because everybody is talking about Game of Thrones (GoT), as HBO has just released the latest and last season of the fantasy drama series.

Here are some simple tricks and basic facts that will help you survive this GoT fever, if you haven’t seen it or you are not caught up.

Whenever somebody starts babbling about a character from GoT, just put on a poker face and say, “But, eventually they all die.” It will work every time because no matter how important the character seems to be to the story line or how loved they are by the audience, they may suddenly be killed.

Your friends will consent, and then you can all get angry and badmouth the author and the people at HBO.

There are hundreds of characters on the show and they get killed and come back to life all the time. Nobody is absolutely good or purely evil. It’s complicated, but remember that the Stark family is the most humane.

Some simple remarks you can use include, “Oh, I love Jon Snow,” or “Sansa Stark is such a stupid girl.” Or just say “Hondor,” which is the name of a large man who is slow of wits and only capable of saying the word “Hondor.”

Daenerys is the girl who owns the dragons, and is considered the best character on the show. She is known as Queen Daenerys in many areas, and her titles also include The Unburnt and Mother of Dragons. And the list goes on as the plot unravels.

So you can just say, “It takes the translator girl forever to announce Daenerys’ name, right?” People will laugh or nod along and see you as one of them.

Another good joke is, “Has winter come yet?” In the fantasy world, each season lasts years, and they always talk about how “winter is coming;” this has been a big deal for a long time.

When something cruel or extremely shocking happens, you should say, “It’s just like the Red Wedding.” The Red Wedding refers to a massacre during a wedding in the show.

Pretend that you are used to nudity and brutality because if you watch any episode, you’re guaranteed to see both sex and murder.

When it comes to the point where you are almost caught for not knowing the specific details of the show, just say, “It’s different from the books.”

It’s a safe response because although it seems there are a lot of book fans, who look down upon on fans who only watch the TV series, books fans are rare to find in real life. If your friend continues to press you and asks what happens in the books, just put on a condescending smirk and say, “Why don’t you go ahead and read the books yourself.”

The ultimate solution would be to just cover your ears and say, “Lalalalala, no spoilers!” This way you can stop the conversation once and for all and you are free from revealing that you actually know nothing about the show.

Whatever you do, don’t confess that you’ve never watched the show because that would be social suicide.

It’s not just because your friends will think less of you and stop talking to you. On the contrary, they will start convincing you that this is the best show ever. As a fan myself, I guarantee you that we will annoy you to death unless you promise that you will watch it.

Source: Global Times

‘Iron friend’

Monday marks Pakistan’s 70th anniversary. And China and Pakistan have enjoyed a strong relationship for more than 65 of those years. Global Times (GT) reporter Wang Bozun spoke to the Pakistani Ambassador to China, Masood Khalid, ahead of the celebration to discuss the China-Pakistan Economic Corridor (CPEC) and bilateral relations.

GT: Security issues have always been considered major challenges to implementing the CPEC. What security measures have the Pakistani government taken?

Khalid: Roughly 30,000 Chinese work in Pakistan. It’s the responsibility of the Pakistani government to provide requisite security protection. As such, the Pakistani government has raised a special force including more than 15,000 soldiers who provide security to Chinese working on CPEC projects throughout Pakistan. In addition, our four provinces are raising their own protection forces. As said, we will continue to do our bit and make security improvements. At large, I think Pakistan’s security situation has improved.

Masood Khalid, Pakistani ambassador to China Photo: Li Hao/GT

In the last two years, we have cracked down on terrorism, militants and their outlets in Pakistan to a great extent. If you look at the figures, you will find terrorist incidents in Pakistan have been considerably reduced.

GT: Besides security issues, what other challenges are there?

Khalid: All mega-projects face challenges. Challenges come naturally. The Belt and Road initiative is a big initiative involving nearly a hundred countries and has to pass through many different countries, territories, cultures, systems, economies and taxation regimes. These could be considered challenges.

But I think the larger picture should be kept in mind: This initiative is for the greater good of humanity of the global community and of the participating countries.

There are similar challenges with the CPEC. In 2013, when Premier Li Keqiang visited Pakistan, both countries decided to launch the CPEC.

But after that, both sides had to undergo long sessions with experts and officials, which took about two years in order to reach consensus. We discussed how to implement the plan, how to finance it and how to translate it into reality … You can say this was challenging.

Principally, we divided the corridor into four main cooperation areas: energy, infrastructure, Gwadar Port development and industrial park and economic zone establishment. Alongside, we also worked on educational and cultural corridors to promote people-to-people connection.

GT: We have heard there are debates in Pakistan regarding which provinces should participate in the CPEC and how it should be implemented. Can you talk about these debates?

Khalid: Debate is a natural thing in the democratic and political system we have in Pakistan. But I don’t think it’s a cause for concern.

There are provinces which need development more than others, such as Balochistan, so they are keen on the benefits of the project. But all provinces will benefit.

GT: Pakistan has just elected a new prime minister. In your opinion, how might the leadership change impact CPEC and China-Pakistan relations?

Khalid: There is no change in policy. There is a new prime minister, but the Pakistan Muslim League is the same ruling party. The new PM has clearly stated that the projects will continue and increase. So there is no doubt or ambiguity on that account.

GT: More Chinese companies are becoming interested in making investments in Pakistan. What is the size of the investments, and what sectors are firms most interested in?

Khalid: A figure released last year in Pakistan showed Chinese investment in 2016 was more than $1.8 billion, which will continue to grow.

But if you put everything together, the cumulative investment figure crosses more than $50 billion, but this depends on when projects start and finish. Currently, projects starting in different sectors could be worth around $45 billion.

Their investments are primarily in energy and infrastructure. But now, there is a trend of small and medium-sized Chinese enterprises in textile, cement, energy and food sectors emerging in Pakistan – we offer a good market for these areas.

GT: What advice do you have for those companies?

Khalid: I would like to advise that they seriously look at Pakistan’s entire market potential.

Firstly, consider our geographical location of being near the Middle East, Central Asia and Africa.

The concept behind the CPEC is linking Gwadar with Kashgar, enabling Chinese exports to go straight through Pakistan to Central Asia, the Middle East and Africa and with lower cost and shorter time.

Secondly, Pakistan is rich in natural resources, which remain untapped. Labor is at low cost and more Pakistanis are learning Chinese.

Also, incentives, facilities and tax exemptions are granted by the Pakistani government to foreign investors.

If you combine these factors, I think Pakistan offers good business environments for Chinese.

GT: There has been an increasingly popular buzzword, “Batie,” which describes the unique relationship between China and Pakistan. What do you think of this Chinese expression?

Khalid: This is a beautiful word. Friendship with China is the cornerstone of our foreign policy. We are close friends, strategic partners, and this friendship has evolved over the last 65 years. In fact, our cooperation is growing, which is a positive sign for the two countries.

There is mutual respect and mutual interest. We believe that our friendship is true, selfless and kind and has withstood the test of both good and bad times.

For example, in 2005, Pakistan was hit by a big earthquake. Subsequently, freights appeared from China to give help and assistance. After the 2008 earthquake in Sichuan, Pakistanis and the government helped our Chinese friends.

These examples signify that, if China is in need, Pakistan is there to help in whatever way we can, and vice versa.

So I truly respect the definition of “Batie,” it means “iron friend.” I think we have established a good foundation for our bilateral relations. Our friendship will grow as we move along.

Photo: Coutesy of the Embassy of Pakistan

GT: What message would you like to send to China on the occasion of the 70th anniversary of Pakistan?

Khalid: The 70th anniversary is important to Pakistan. It’s a developing country and has faced many challenges, but it has overcome past challenges successfully.

We highly value our relationship with our friends. Pakistan and China serve for regional peace and stability. We welcome our Chinese guests on this occasion and a strong message of unity will be sent to the world.

GT: Some Indian media outlets have published a map of China that excluded Tibet and Taiwan and also suggested that China is working with Pakistan to corner India. What is your comment on that?

Khalid: We also suffer from this mischief by the Indian media from time to time, it’s unfortunate.

I think the entire world recognizes Taiwan and Tibet are part of China. I don’t think stirring controversy is the right approach because this causes instability within bilateral relations and also in the region.

The Pakistan-China relationship is not against anyone; it is for peace, progress, stability and regional development. Peaceful co-existence is our mutual policy. But if a neighbor is aggressive, we, as sovereign states, must defend our territories.

Source: Global Times

Chinese pianist Li Yundi to begin concert tour of five Chinese cities with the Warsaw Philharmonic Orchestra

Chinese pianist Li Yundi will share the stage with the Warsaw Philharmonic Orchestra for a series of concerts in China as a part of pre-celebration events for the 100th anniversary of Polish independence in 2018, Wu Promotion, the promoters of the event, announced in Beijing Thursday.

The concerts will be held in Chongqing, Guangzhou, Shenzhen, Beijing and Shanghai from August 29 to September 5.

The series will mark Li’s first attempt to act as both conductor and pianist for the same concert. At the announcement event, Li acknowledged that taking on these two roles will prove difficult.

“Fortunately, I have prepared for this challenge for a long time,” he said

Li entered the international spotlight in 2000 when he won first prize at the XIV Chopin International Piano Competition at the age of 18.

Source: Global Times

‘Comfort women’ documentary focuses on victims as individuals

Chinese director Guo Ke Photo: Courtesy of Guo Ke

It can be one of the hardest things to dig up a past one would rather forget. Yet, some history will end up fading away if we ignore the tragedies of the past.

In the spirit of remembering the tragedies of the past in the hopes they will never happen again, a documentary featuring 22 Chinese “comfort women” premiered in Chinese mainland theaters Monday, which also marks the International Memorial Day for “Comfort Women.”

The film, Twenty-two, was directed by Guo Ke.

Originally Guo intended to shoot a feature film based on the story of Wei Shaolan and her half Japanese son Luo Shanxue. Wei was forced into sexual slavery as a “comfort woman” by Japanese forces in 1944 at the age of 20. She was fortunate enough to escape her captors three months later, but soon found that she was pregnant with a Japanese soldier’s child.

“When I met Wei, I was shocked by her outlook on life. She was optimistic and always looking at the world in a beautiful light,” Guo told the Global Times, adding that his meeting with her challenged his previous idea that Wei would be miserable after her experiences.

Guo ended up exploring Wei’s story in the short documentary Thirty-two, named after the number of former “comfort women” who were still living in 2012.

It is estimated that in the Chinese mainland alone, some 200,000 women and girls were forced to become “comfort women” by Japanese forces.

When Guo learned that this number dropped to 22 in a mere year’s time, he decided that it was time someone record their stories in film.

Over the next year, Guo and his team would travel to five provinces throughout China to meet and document these women’s experiences.

Promotional material for Twenty-two featuring (from left) Wang Zhifeng, Fu Meiju and Li Meijin Photo: Courtesy of Guo Ke

“There are only eight of them still alive today,” Guo noted.

Guo’s project has received support as well as objections from Chinese society, with objectors stating that interviewing these women and having them relive their past pain is unnecessarily cruel.

Answering these doubts, Guo said that his documentary is more about how these aged women looked at the world in 2014 than it is about digging up painful moments.

“It was just like listening to my grandma tell us stories as a child,” Guo said, adding that he never pressured the women to continue if they did not wish to.

Guo explained that while younger generations tend to get angry when they talking about the history of “comfort women,” those he interviewed, like Wei, were optimistic about life. He mentioned that one of the women was shown a picture of a elderly former Japanese soldier and to his surprise, she just giggled and said, “That Japanese man is old too. Look he barely has any mustache left.”

According to Guo, while the plight of China’s “comfort women” has often been talked about, the women themselves have not been taken care of very well.

“They are only remembered by their identity as ‘comfort women.’ No one knows their real names or what their situation is like today,” Guo noted, explaining that showing these women as individuals was one of the main motivations behind making his film.

Source: Global Times

Market research lacking in China’s sharing economy

E Umbrella lost nearly 300,000 umbrellas. The admittedly comical story raced around the world, with article after article chronicling the downpour on the beleaguered start-up. Undeterred, however, E Umbrella’s owner Zhao Shuping wants to release 14 million more umbrellas before the end of the year.

This laughable event offers a real business case study. While cars and bicycles are perfect for sharing start-ups, umbrellas are a step too far. This was a quick attempt to cash in on a trend without thinking about whether the market needed it. Umbrellas are needed until people get home, so they are unlikely to hang them up before getting there. Chinese start-ups need to take a step back and carry out proper market research before wasting millions.

The lack of such market research among Chinese small business is all too evident. If a hairdresser is seeing booming business on an affordable street, three hairdressers are likely to pop up nearby. Little thought may be given to the fact that the area does not have enough demand for four hairdressers or that the first one may have a truly skilled barber or offer better service.

This thinking has flowed over into the sharing economy, with successes such as Didi Dache and Tujia spawning countless spinoffs, sharing ever more incongruous objects. The concept of E Umbrella is a flawed one off the bat for reasons outlined above.

Zhulegeqiu is a similarly wacky idea on paper, sharing basketballs. However, it has found its niche, especially on university campuses. In Beijing, Shanghai or Hangzhou, East China’s Zhejiang Province, basketballs are dunked and put back in machines with not much evidence of theft, certainly not on a scale to disrupt the company. This is different from umbrellas, however, in that basketballs are not used by everybody and those renting them are likely to do so in a pinch.

Xiangshui Space, however, exemplifies a lack of research into demand and regulations before creating supply. The company provided napping pods for office workers to take a break. But instead of a controlled, progressive rollout, Xiangshui went for broke and ended up broke. It set up its unwieldy contraptions in 18 cities, including six in Beijing’s high-tech area of Zhongguancun. With a bed, disposable sheets, Wi-Fi, a fan and lighting, the overhead and maintenance could not have been small.

A month after setting the pods up, Xiangshui got shut down for lack of the proper licenses. Worse, interviews quickly sounded the death knell of any company: the public did not understand why it existed. Customers thought the pods to be the same as capsule pods, not temporary rest spaces for tired workers, an incredibly small niche.

The omnipresence of contactless payment options in Chinese cities makes sharing start-ups very tempting. China’s own State Information Center has suggested that the sharing economy could account for 10 percent of GDP as early as 2020.

The country is even resistant to foreign incursions. Uber entered China to great fanfare, was not able to fight off local competitors, and had to sell its operations to Didi in exchange for a minority stake after losing around $1 billion a year. Airbnb has managed to maintain a foothold, although it only has around 80,000 listings in China of 3 million worldwide. It is going all in, launching in China as offering its services through WeChat and Alipay.

However, the sheer volumes of investment Chinese rivals are pulling in make this a daunting task. In August 2015, Tujia raised $300 million and is backed by Ctrip, the country’s largest travel agency, putting Airbnb at a massive disadvantage. Bike-sharing options are seeing similar expansion. Mobike, based in Shanghai, closed on a $600 million round of funding in June although its international aspirations are not going well.

Perhaps uniquely in the world, the Asia-Pacific is ready to embrace sharing due to a specific sense of community, a desire to find cheaper mobility and travel solutions and a sense of real overcrowding in the likes of Beijing and Tokyo. In 2013, a survey by Statista and Nielsen found that 81 percent of people in the Asia-Pacific region were willing to take part in the sharing economy, with 78 percent willing to share their own property. In North America, the latter figure was just 52 percent and 54 percent in Europe.

However, no boom can survive without its busts. China’s graveyard of sharing-economy failures may continue to expand if market research is not done thoroughly.

Source: Global Times

Strains in Sino-Indian trade, economic ties

An increase in India’s anti-dumping probes against Chinese products amid political tension in a border area will damage bilateral trade and economic ties, experts cautioned Sunday, saying that China should appeal through the WTO to address frequent trade remedy investigations by India.

The Indian government last week imposed anti-dumping duties on 93 items from China including chemicals, machinery, steel, fibers, yarn, rubber, electronics and consumer goods, The Hindu Business Line reported Friday.

The report did not specify the rates of the anti-dumping duties. It also said that 40 other cases concerning imports from China have been initiated by relevant Indian authorities.

The number of Chinese products subject to anti-dumping duties by India is quite large this time and such a situation is unusual and highly negative, said Tu Xinquan, deputy dean at the China Institute for WTO Studies at the Beijing-based University of International Business and Economics.

Tu told the Global Times Sunday that the trade imbalance between China and India is a major reason for the large number of products involved.

In 2016, India’s exports to China decreased by 12.3 percent year-on-year to $11.748 billion while India’s imports from China were up 2 percent to $59.428 billion, according to information posted on the website of the Embassy of India in China. India’s trade deficit with China rose by 6.28 percent year-on-year to $47.68 billion last year.

“Indian products are less competitive than China-made products and India is not happy about it … in recent years, the country has been taking rising protectionist actions against China and has launched many anti-dumping probes into Chinese products [to protect its own industries],” Tu said.

Tu said that India is committed to developing more manufactured products under the ‘Make in India’ campaign, but that will still take a long time.

Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times that India’s trade deficit with China is caused by their different industrial structures and India should take a more mature stance in dealing with it.

Trade friction also exists between China and the US as well as China and the EU, but neither the US and EU resorts as frequently to trade remedy measures against China as India, according to Bai.

“It is unwise for India to pursue trade protectionism against China, a move seen as closing down its market,” he said.

India initiated 12 probes against Chinese products in the first half, becoming the country with the most trade remedy investigations against China, Gao Feng, spokesman of the Ministry of Commerce (MOFCOM), said at a press conference on July 6. During the same period, 11 investigations were launched by the US.

Considering the previous friendly Sino-Indian relationship, China did not actively respond to India’s frequent anti-dumping investigations, but as India has crossed the line and gone a little too far this time, China should appeal to the WTO as there are many unreasonable aspects of India’s anti-dumping investigations against China, according to Tu.

The political tension between the two countries caused by the ongoing military stand-off in a border area also brings challenges to the bilateral economic and trade relationship, experts noted.

The Sino-Indian economic and trade relationship provides much scope for cooperation if political issues are not involved, Tu noted.

“A stable economic and trade relationship between China and India benefits both parties and bilateral economic and trade relations should not be politicized,” he said.

If bilateral economic and trade ties worsen, Chinese companies will be hurt more because more Chinese businesses are seeking growth in the Indian market, experts said.

The MOFCOM told the Global Times in an interview in July that China is willing to make efforts with India to properly tackle trade friction via talks, negotiations and industrial cooperation.

The ministry said that China attaches much importance to its relationship with India, and it has actively linked bilateral development strategies and deepened pragmatic cooperation.

Source: Global Times

MMA club sheltering, training orphans forced to kick them out

A child watches grown-up fighters spar at the Enbo Fight Club in Chengdu, Sichuan Province. Photo: CFP

The owner of a martial arts club that trains orphaned teenagers said he will not accept children from the impoverished Liangshan region any more, amid pressure from the local government and public accusations that he is “exploiting” the minors.

En Bo, a retired special police officer, founded the Enbo Fight Club in Chengdu, Sichuan Province in 1995 and later started to train orphans in mixed martial arts. The children receive training and accommodation for free, but have to fight in commercial bouts.

In late July the media reported on the club, putting En and the children under the spotlight. The club has “adopted” more than 400 such children who came voluntarily, mostly orphans or those from extremely poor families.

The children strictly follow a rigorous training routine every day, training hard to avoid being kicked off the team. Some even hope to find glory with the US-based Ultimate Fighting Championship in the future. “My idol is zuipao (Conor McGregor),” one of the young boxers told Jumian, a news video producer.

A lot of the children come from Liangshan, a mountainous Sichuan prefecture and one of the poorest regions of China. The large numbers of orphans and left-behind children who receive inadequate care has long been a problem in Liangshan, which is haunted by extreme poverty, drug addiction and HIV.

En said he first started to train children from Liangshan at the request of local civil affairs officials who asked him to allow the kids to join a cooperation project he was running with the government to train boxers.

As this project went well at first, more children began showing up, sent by their guardians or village officials. Besides martial arts, the club taught them classes like Chinese, mathematics and ethics.

However, after reports about the club went viral, the Liangshan education bureau said the children should receive a proper education. It has been reported that the bureau has sent personnel to collect some of the children and return them to their homes.

Children who spoke to the media said they want to continue training, as the meals they are given are better than their diet of potatoes back home.

En said he would not accept trainees from Liangshan again and has turned down two children from the region since the story went viral.

“I will recruit at least 100 children from my hometown before the Spring Festival. I will let them see,” he said.

Source: Global Times

Pay-as-you-go gym latest innovation in China’s sharing economy

Xiao Su, a workout fanatic, was surprised to find out that the nondescript booth he spotted on his way to the gym was also a gym.

“I downloaded the app for it out of curiosity. I have to pay 99 yuan ($14.86) deposit for registration with my ID number and phone number, and it charges me one yuan per five minutes,” Su told the Global Times Friday.

The booths only have enough space to hold two people at once – but only one of them can exercise as the gym’s sole piece of equipment is a treadmill.

The gym booth is also equipped with an air conditioner, a mini-television and fan.

“I prefer traditional gyms over this shared gym because they have more options for exercising and are much more spacious,” said Su.

“Moreover, you can wash after working out in traditional gym. Who’s willing to walk out all sweaty and smelly?” he added.

Value for money

The gym booth app, “Mipao,” only showed five booths available for users’ to make appointment in Beijing on Thursday. After users make an appointment, they can access the booth by scanning a code on its exterior, according to the description on the app’s iTunes download page.

The description explains that the application can record a user’s movement and offer workout guidance afterward to “create a brand new, healthy and smart way of exercise.”

China’s first shared gym popped up in Chengdu, capital of Southwest China’s Sichuan Province in February, the Chengdu Business Daily reported.

Unlike the Beijing running box, the Chengdu shared gym offers exercisers both machines and free weights, said the local newspaper report.

“Many of my colleagues have started using shared gyms because we usually have to get a yearly card with normal gyms, but with this one, you only pay when you use the machine,” a Chengdu resident surnamed Tang, told the Global Times.

Tang said that he used to spend thousands of yuan on buying a yearly membership to a gym, but only worked out a few times a month. “I felt like most of the money

I spent on the gym was wasted, but I only spend about 10 yuan every time I use the shared gym.”

Smelly sleepers

The shared gym concept is creative and shows that Chinese entrepreneurs are innovating in the shared economy, Hu Xingdou, economics professor at the Beijing Institute of Technology, told the Global Times.

He noted that the sharing economy concept originated in the West, but China has an unmatched variety of sharing start-ups.

Of the sharing start-ups, bike-sharing firms such as Mobike, Ofo and Bluegogo are the most popular.

Ofo has stepped up its efforts to break into foreign markets. Currently, Ofo is operating in 100 cities globally including in the US, the UK and Singapore, with a total of 5 million bicycles in use and 100 million registered users, according to a document the firm sent to the Global Times earlier this month.

Following the success of the bike companies, other start-ups have thrown their hat into the ring, offering shared portable batteries and umbrellas.

In 2016, about 60 million individuals participated in the sharing economy in China, up 20 percent from the previous year, according a February report from the State Information Center’s Sharing Economy Research Center.

Hu said that the emerging shared economy needs government supervision and attentive management by entrepreneurs as “some parts of the sharing economy are chaotic.”

Beijing police forced a shared-bed start-up to cease operations in July shortly after it opened, China Central Television (CCTV) reported, without citing an official reason for the police action.

However, critics of the shared beds had expressed safety and hygiene concerns. “It was smelly inside and you could hear sounds from next door,” a user named Xiao Li was quoted by CCTV as saying. He also said that he paid 12 yuan for just half an hour, “which is a little pricey.”

Hu warned that people’s bad behavior poses a threat to the sharing economy.

Many shared bikes have been broken, stolen by people who use their own locks on the bike or parked in inappropriate locations.

A man in Guangzhou, South China’s Guangdong Province, was sentenced to three years in prison in May for throwing a shared bike from a bridge to “vent his anger,” New Express reported.

Source: Global Times

Music loving cow goes viral

A cow recently became a hit online after it was seen enjoying piano music during the Huanglong Music Season in Zhangjiajie, central China’s Hunan province.

The cow has since become an object of much curiosity at Zhangjiajie National Forest Park and even receives a monthly allowance, Chinanews.com reported.

A video from International Piano Art Week section of the event shows the cow standing close to a visiting piano player under the trees, listening attentively to the music.

The cow’s response to piano music became an instant celebrity, with many visitors rushing to take photos with it.

Meanwhile, Zhangjiajie authorities have decided to award the now famous cow a monthly allowance of 1,200 yuan ($180) and its owner 1,000 yuan ($150). The cow is likely to be listed as a scenic spot near the Huanglong Cave.

Transatlantic alliance announced

A transatlantic alliance between three global airlines will shore up their positions in the lucrative UK-US market, shielding them from low-cost rivals and the uncertainties of the UK’s exit from the EU.

Delta Air Lines, Air France-KLM and Virgin Atlantic have announced plans for a 15-year partnership on routes between Europe and the US as well as equity deals which will see them take stakes in each other.

The joint venture will see the three carriers share their profits on transatlantic routes.

It will give Air France-KLM greater access to the UK-US market – a market among the most profitable – while the Franco-Dutch group’s short-haul European flights could bring more customers to Virgin’s US-bound flights from London.

The ability to offer customers a host of extra flights could give US carrier Delta an edge against domestic rivals, including American Airlines and United Airlines.

The new alliance also provides each partner with an upper hand in the business travelers market ahead of Brexit, should the UK’s EU departure lead to a consequent drop in air traffic from London.

Global banks have already said they could move thousands of jobs out of the UK to prepare for Brexit, while two major EU regulators are seeking new homes.

“This is a play on Delta’s part to protect itself as Brexit unwinds, should London lose traffic,” said Atmosphere Research Group analyst Henry Harteveldt.

The partnership, expected to come into effect in 2018, will also strengthen the three big players’ positions at a time when low-cost entrants Norwegian Air Shuttle and Wow Air are shaking up the US-Europe market – though their share of flights remains small at present.

It will also allow for better use of the three airlines’ London Heathrow slots, analysts said, allowing them to free up extra short-haul capacity and instead move it to long-haul routes.

‘Skin in the game’

The partnership, which is subject to regulatory approval, will combine two existing and overlapping transatlantic joint ventures supported by equity deals worth $1 billion.

Willie Walsh, CEO of rival airline group IAG, said Air France-KLM’s investment in Virgin Atlantic – of which it plans to take a 31 percent stake – could give it a bigger say in how the UK’s aviation landscape will look post-Brexit.

“It probably represents a positive in terms of Air France’s position in what the rules should be after Brexit… they have skin in the game,” he told analysts.

Most of the transatlantic market is controlled by joint ventures between global airline heavyweights.

The new alliance will hold about a 27 percent share of the total transatlantic flights in comparison to the 24 and 22 percent shares for the other two rival groupings.

Walsh declined to comment on what the impact could be on IAG’s own transatlantic partnership with American Airlines. He did say, however, that he will remain positive on the future of the transatlantic market, despite the recent increased competition.

It is not known which ownership rules will apply after Brexit and whether the UK will remain part of the single European aviation market or the EU-US Open Skies pact. As such, analysts expect carriers to look for creative solutions.

Air France-KLM said that it had agreed on an insurance plan for ownership of Virgin Atlantic, which would see Virgin Group, whose stake is due to drop to 20 percent, regain a majority share should the carrier need to be fully UK-owned after Brexit.

“In terms of influence in the important Heathrow and North Atlantic market, this ticks all the boxes, and with Richard Branson [founder of Virgin Group] moving to a minority position, it will potentially allow a realignment of usage of Virgin’s Heathrow slot portfolio,” consultant John Strickland said.

Source: Reuters-Global Times