American Airlines in talks with Chinese

American Airlines Group Inc. is in advanced talks over a deal in which the carrier would acquire a stake in China Southern Airlines Co., according to people familiar with the matter.

The negotiations focus on an investment of about $200 million by Fort Worth-based American in China Southern's Hong Kong-listed shares, said the people, asking not to be identified as talks are confidential. The sale likely would take place through a private placement, one of the people said. China Southern has a market value of about $10 billion.

An investment in China Southern would allow American to strengthen its presence in a market that the International Air Transport Association predicts will surpass the U.S. to become the world's biggest in terms of passenger numbers by 2024. Delta Air Lines Inc. acquired a minority stake in China Eastern Airlines Corp. in 2015.

Under the discussions, American would nominate an observer without voting rights to the Chinese company's board, the people said. Details of a deal are subject to change and a transaction could still fall through.

China Southern representatives couldn't immediately comment when reached after regular business hours. A spokesman for American Airlines declined to comment.

Upcoming Events