China Southern Airlines is taking advantage of new fleet types to push farther into key long-haul markets, as the domestic giant increasingly shifts its focus to its international network.

The carrier is, by any measure, one of the largest in the world. However, for an airline of its size, it has a relatively modest long-haul portfolio. It is working to change that, and next year will take a major step by launching its first route to the New York market. Further expansion to Europe is also on the cards, as is more growth in Australasia—which so far is the airline's most important region outside China.

Service from its main Guangzhou hub to New York will begin in July, says China Southern CEO Tan Wangeng. “The market in North America is very important, but we currently do not have a presence on the East Coast,” Tan says. China Southern only serves two North American destinations with passenger flights—Los Angeles and Vancouver.

The carrier has been waiting until it has the appropriate aircraft type to operate the New York route, notes Tan. That will be the Boeing 777-300ER, with the first of 10 orders due to arrive in February.

As well as New York, the -300ERs could be used to launch other North American, European and Australasian routes, the airline's Executive Vice President He Zongkai tells Aviation Week. Closer to home, the carrier already has a good spread of Asian destinations.

China Southern has so far based its international growth on its Guangzhou hub, particularly since its efforts to begin Airbus A380 long-haul service out of Beijing have been blocked by incumbent Air China.

Tan says that boosting European flights will be a growth priority. While China Southern does not have a large network there, Tan stresses that it has been steadily increasing its routes. Five years ago the carrier only operated a three-times-weekly service to Paris, he says. Since then, “we have witnessed huge developments of our presence in the European markets.” The airline now flies to London, Amsterdam, Paris and Moscow.

London is a market with obvious growth potential, and Tan mentions that the carrier may consider expanding its single daily Boeing 787 service to both a morning and an evening flight. This would offer better connections to its broad Australasian network.

Australia and New Zealand will continue to be a major focus for China Southern. Tan says that the region is currently “the most important international market” for the carrier, and “a [key] component of our internationalization” efforts.

China Southern will operate 48 flights a week to six destinations in Australasia by the end of the year—about as many routes as it has to Europe and North America combined.

The carrier has further underlined its commitment to this market by introducing its newest aircraft types there. China Southern launched its first A380 flight to Australia on Oct. 27, replacing an Airbus A330-300 on one of its two daily flights to Sydney. This is just its second international A380 destination.

Less than a day later, the carrier introduced a Boeing 787 to its daily Auckland, New Zealand, service, taking over from Airbus A330-200s. This marks the first scheduled 787 service to this country by any airline, beating both Jetstar Airways and Air New Zealand. As with the A380, it is also China Southern's second overseas route for the 787.

The heavy emphasis on Australasia began about five years ago, when China Southern first launched its international expansion strategy. At the time, only 15% of the airline's operations were international, which Tan says was “not healthy.” If a downturn were to occur in the domestic market, China Southern “did not have enough backup from the international operation. That is why we decided to make a change and increase the percentage of the international operation.”

The carrier set a target of doubling the proportion of international operations to 30%, a goal it is close to achieving.

The airline recognized that it could take a long time—as well as a lot of effort and resources—to mature an international market. So, according to Tan, it needed to find a market where it would have inherent advantages over its neighboring airlines.

These factors led to the selection of Australasia to “test the water” for international expansion, says Tan. After detailed analysis, China Southern determined that it had competitive advantages over rival Chinese carriers—and many other Asian airlines—in serving this particular market.

China Eastern and Air China benefit from having international hubs in larger cities Shanghai and Beijing, but because Guangzhou is in the southern part of the country, it is better situated as a connecting hub for Australian flights. The location is close to ideal for the highly sought-after one-stop market between Australia and the U.K., and travelers can also save hours connecting to Chinese domestic and some other Asian destinations.

Recognizing these factors, China Southern has boosted its Australasian service sevenfold from the seven weekly flights it offered in 2009. Growth is far from finished here, and Tan says Christchurch, New Zealand, and Adelaide, Australia, will be the next additions in the region.

The airline currently has a fleet of 540 aircraft—including its Xiamen Airlines subsidiary—and is growing at a rate of 10% a year.

For its widebody fleet, in addition to the 777-300ER orders, the carrier also has 13 A330-300s slated for delivery. Five of the 10 787s it ordered have been delivered. The first 787 route was to London, followed by Auckland; Tokyo and Vancouver are expected to be next.

All five of the carrier's Airbus A380s have been delivered, although not all are being used on international routes. Its only long-haul A380 routes are Sydney and Los Angeles, meaning that some of these aircraft have to be deployed on domestic routes.

The main reason for this is China Southern's inability to gain government approval to operate A380s on international routes out of Beijing—the hub for Air China. Tan says the two carriers are “exploring cooperation opportunities for using A380s” out of the capital city. He plays down the effect of the Beijing impasse, noting his airline does not have a large number of A380s yet.