American Airlines (AAL) - Get Report may be preparing to invest $200 million in Chinese carrier China Southern Airline, significantly expanding the Dallas-based American, according to a published report.

Bloomberg News, citing people familiar with the situation, said the possible investment would value China Southern at about $10 billion. The news agency added that under the proposed deal American would get a non-voting seat on the Chines carrier's board.

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.

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Earlier Wednesday Morgan Staley downgraded American Airlines to "Equalweight" from "Overweight" with a price target of $44, down from $52.