CHINA: China Southern Airlines After Corruption Scandals Has New Chairman

A new chairman has filled the vacancy at Asia’s largest airline company by fleet size, China Southern Airlines Group, in a sign that the sector’s biggest corruption probe may be over.

Wang Changshun, a vice-minister in the Ministry of Transport, was appointed China Southern’s chairman and deputy Communist Party secretary on Monday, the company said in a notice on its website on Wednesday, four months after former chairman Si Xianmin was taken away for investigation.

Wang, a China Southern veteran who was once Si’s predecessor, faces the task of improving the image of the company after six senior executives were removed in the course of a year after the party’s anti-graft watchdog visited the company in December 2014.

People at the airline said Wang’s arrival was seen as a sign that the management reshuffle brought about by the corruption probe was over. “The situation and sentiment has been stable,” one said.

Wang, 58, is taking on a job that is likely to be his last before retirement. He last worked at China Southern as chairman of the listed company between 2000 and 2004 – a post Si took over – before leaving for the Civil Aviation Administration of China. He then led flag carrier Air China as group chairman from 2011 before joining the government in January 2014.

Si, who resigned from China Southern in January, was expelled from the party and handed to the judiciary for “ serious disciplinary violation” that included suspected bribery, the Central Commission for Discipline Inspection said in a notice on its website on February 3. Si had abused his power to benefit his family, permitted illicit transfer of public funds, and his son had accepted bribes, the party watchdog said in the notice.

The commission said after its inspection of China Southern last year that it had found problems at the airline including frequent corruption in sales and marketing, power-for-money deals in route planning, and rent-seeking in aircraft procurement and servicing.

But the scandals appear to have done little harm to the Guangzhou-based airline that continues to transport the most passengers in China.

It is forecasting a full-year profit for 2015 of between 1.95 billion and 2.3 billion yuan (HK$2.31 billion to HK$2.72 billion) on strong traffic growth and low fuel cost, 110 per cent to 130 per cent higher than the year before, it said in stock exchange filings last month.