China's traditionally isolationist flag carriers are taking the initiative to ally with foreign counterparts in order to take advantage of increasing liberalization and maintain their competitive position.

Among the three principal carriers, China Eastern Airlines is the only one uncommitted to a global alliance, preferring to seal its partnership with Singapore Airlines first. CEA President Li Fenghua said that SIA's investment does not tie his carrier to Star Alliance, nor does the fact that oneworld has yet to secure a Chinese member render that alliance the only option. "We are leaving all the options open, as the point is to identify which airline alliance is the most suitable for us to boost growth," he said.

Meanwhile, Air China and China Southern Airlines are restructuring various departments to meet requirements established by Star Alliance and SkyTeam respectively. CA expects to join Star Alliance formally in December. "Our top priority is to join Star Alliance, as we will be able to optimize our network through deeper cooperation with other Star Alliance members to earn profit," MD-International Affairs and Cooperation Lou Yongfeng recently said.

Lou said boosting airport infrastructure is key to meeting Star Alliance standards. To that end, CA recently convened a conference in Sichuan Province at which leaders from 33 domestic airports committed to supporting the carrier's effort.

China Southern expects to join SkyTeam this year as well, which domestic industry analysts predict will help shore up the carrier's thin international network.

Chinese airlines also are keen to cooperate on cargo operations. Domestic carriers' share of the international cargo market plummeted from 65.6% in 1995 to the current 23.8% and they are looking for foreign partnerships more frequently in order to reverse that trend. For example, Air China expects to launch a Shanghai-based cargo carrier with Cathay Pacific Airways this year, while China Southern has confirmed it is talking with Air France-KLM about a cargo joint venture.

With China's big three committed to finding support abroad, industry analysts are indicating that smaller domestic carriers may be unable to compete unless they take similar steps.