American Airlines is reportedly investing $200 million in China’s largest airline

American Airlines Airbus A319

American Airlines might be spending some serious cash in China.

People familiar with the matter told Bloomberg that American Airlines is reportedly in advanced talks to invest $US200 million in China Southern Airlines at a valuation of $US10 billion.

According to the publication, American’s investment in the airline’s Hong Kong-listed shares will reportedly buy it a non-voting seat on China Southern’s board.

American’s perspective investment in China’s largest airline makes an incredible amount of sense.

Fort Worth, Texas-based American is a member of the Oneworld airline alliance that does not currently have a mainland Chinese member airline. (Cathay Pacific is based in Hong Kong.) With China Southern’s vast network in the fold, American will now hold a much more attractive position in the lucrative Chinese market.

This isn’t the first time a US airline has invested heavily in China’s airlines. In 2015, Delta purchased a 3.35% stake in China Eastern Airlines for $US450 million.

American Airlines was not immediately available for comment.

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