Qantas Frequent Flyer - Asia gets nervous!

http://www.chinapost.com.tw/business/middle-east/2012/07/31/349411/Qantas-should.htm

Gotta love the wheeling and dealing QF may be involved in ;)

It's going to be quite difficult for Qantas to leave SIN. After all, assuming I'm counting correctly, it is the 2nd busiest hub in terms of number of international flights in its network.

I think personally that if QF were to do this EK deal, or move to Dubai at any rate, they'd just get swallowed up by Emirates. Why would passengers going from Europe -> Dubai -> Oz switch to a QF plane halfway through? EK have a large and increasing set of routes to Australia already. And the indication in the articles on the potential QF/EK tie-up suggested that they'd drop Frankfurt and only fly from LHR in Europe. EK has exclusive feeder traffic on every other destination.

Therefore I think a QF move to Dubai would be a disaster. They're better off sticking with their BA alliance in SIN, where they can be more competitive. SQ's hub is not nearly the same kind of transit pax operation as EK. Neither situation is great, and neither will on its own fix Qantas, but a deal with EK sounds like a bad idea.

And that's on top of the arguments in the article. Makes sense for QF to go SIN and then on to Jetstar as well.

And the indication in the articles on the potential QF/EK tie-up suggested that they'd drop Frankfurt and only fly from LHR in Europe. EK has exclusive feeder traffic on every other destination.

Therefore I think a QF move to Dubai would be a disaster. They're better off sticking with their BA alliance in SIN, where they can be more competitive.But haven't you just identified the exact problem with sticking with BA? The BA/QF combination over SIN can't offer sensible connections to any European ports other than LHR (or, currently, FRA). Anyone else flying from Australia to nearer European ports would naturally gravitate towards using EK or a similar airline so that they can get there with only one stop and a much shorter journey time, so EK are going to eat QF on this traffic in any event.

I think personally that if QF were to do this EK deal, or move to Dubai at any rate, they'd just get swallowed up by Emirates. Why would passengers going from Europe -> Dubai -> Oz switch to a QF plane halfway through? EK have a large and increasing set of routes to Australia already.

I do agree with abczyx. Who would need QF then? Mediocre airline with low service standards and average FF program...

The BA/QF combination over SIN can't offer sensible connections to any European ports other than LHR (or, currently, FRA). Anyone else flying from Australia to nearer European ports would naturally gravitate towards using EK

Let me remind you that 22 years ago QF also served BEG/ATH/FCO/CDG (plus LHR/FRA)... When in 2002 (IIRC) EK commenced service to PER (yes - PER was their first destination in AU), I requested our Travel Manager to talk to them about a deal in C - they offered us a very nice deal and we still maintain a relationship... (and QF virtually ignored us then).

Let me remind you that 22 years ago QF also served BEG/ATH/FCO/CDG (plus LHR/FRA)... When in 2002 (IIRC) EK commenced service to PER (yes - PER was their first destination in AU), I requested our Travel Manager to talk to them about a deal in C - they offered us a very nice deal and we still maintain a relationship... (and QF virtually ignored us then).

Emirates 1st destination was Melbourne ( DXB-SIN-MEL ) and they were running this in the 1990s

Dave

Let me remind you that 22 years ago QF also served BEG/ATH/FCO/CDG (plus LHR/FRA)... W\

And you had five stops, and a once a week service was viewed as fine.
QFi flies a lot more services than 22 yrs ago, and faces a lot more competition, many of it from airlines with much cheaper cost bases.

Despite QFI's woes(desperation?), it's nice to note they may still hold some cards with regard to SIN/Changi.

I still think a CX and/or QR option make alot more sense.
Popcorn in hand waiting and watching.

CJ

But haven't you just identified the exact problem with sticking with BA? The BA/QF combination over SIN can't offer sensible connections to any European ports other than LHR (or, currently, FRA). Anyone else flying from Australia to nearer European ports would naturally gravitate towards using EK or a similar airline so that they can get there with only one stop and a much shorter journey time, so EK are going to eat QF on this traffic in any event.

The problem exists regardless of whether QF stays with BA or joins EK. It's a fundamental issue of Qantas not offering enough destinations in Europe to compete with the Asian and Middle Eastern carriers, and demonstrates the grand success of EK's trans-Dubai strategy.

All I'm saying is that, by avoiding DXB, Qantas and BA would probably do better with handling the part-route passengers (e.g. SYD-SIN, LHR-SIN). I think SQ and Cathay are probably easier to compete with in this category, and neither SIN, HKG nor BKK are transit hubs to quite the epic scale that Dubai is.

I don't think QF would benefit from all of the services EK has from Europe to Dubai, simply because most passengers would just stick with Emirates. It's not even a reflection of Qantas' quality, merely the fact that most people would tend to book both parts with the same airline.

It is a tenuous argument yes, but to be frank, as you pointed out, QF don't have a great hand to play. Either way, EK are very tough competition and that's before you add SQ, TG, CX etc. The plus points for SIN aren't great, but at least there are a handful of things to go on (East Asian focus, Jetstar etc.), plus a teeny tiny chance QF might rebuild a network in Europe. If they switched to Dubai, QF would be resigning themselves to LHR as their only European destination.

(Too long version - SIN not great, but DXB worse)

QF should partner with CX (I have mentioned several reasons before, plus these new ones).

- A SYD/MEL-HKG flight can use one aircraft per day, whereas a LHR flight requires 3 (even DXB requires 2).
- CX is not as strong in Europe, and can stand to gain from additional feeder traffic (to perhaps allow CX to increase their FRA services for example).
- Middle Eastern connections available via HKG with J/W/Y product (to DXB, AUH, BAH, RUH, JED) - also to AMM on RJ.
- If QR joins oneworld, they have very strong operations out of BKK, HKG, SIN and member-elect MH hub in KUL. QF could then do a JBA with QR and BA without jeopardising the relationship with existing partners.

QF should partner with CX (I have mentioned several reasons before, plus these new ones).

- A SYD/MEL-HKG flight can use one aircraft per day, whereas a LHR flight requires 3 (even DXB requires 2).
- CX is not as strong in Europe, and can stand to gain from additional feeder traffic (to perhaps allow CX to increase their FRA services for example).
- Middle Eastern connections available via HKG with J/W/Y product (to DXB, AUH, BAH, RUH, JED) - also to AMM on RJ.
- If QR joins oneworld, they have very strong operations out of BKK, HKG, SIN and member-elect MH hub in KUL. QF could then do a JBA with QR and BA without jeopardising the relationship with existing partners.


That CX is not as strong in Europe is a good argument to partner with Emirates. Dubai has great connections into Europe

As far as what LHR can do, a big issue I see is that there are a lot of other places in Europe where passengers may want to go to ; going via London to get to places like Rome, Athens etc is not exactly a great choice; Dubai gives a nice connecting point to avoid overflying ones destination.

I see lots of benefits to Qantas with an arrangement with EK, but have trouble seeing what great benefits EK gets out of the deal

Qantas is an airline in its own right; any alliance membership should not work to detriment of itself ; if having to worry about what other airlines think when trying to improve ones own position would suggest to me that the alliance is perhaps something not to be a member of

Completely agree with Dave Noble on this one.
I cannot see what EK will get out of this, except may be eliminate a competitor, and I hope that the relationship does not pan out.

OneWorld passengers will have a bit more choice when MH joins the alliance (hopefully by 1Q2013) to offer Australian passengers one stop services from the major Australian cities to CDG, AMS and FRA (in addition to LHR).

OneWorld passengers will have a bit more choice when MH joins the alliance (hopefully by 1Q2013) to offer Australian passengers one stop services from the major Australian cities to CDG, AMS and FRA (in addition to LHR).

All of those are close together at the western end of Europe. What about those travelling to the rest of Europe. I don't know many people who want to fly over their destination (figuratively) fly for a couple of hours, connect and then fly another couple of hours back again

All of those are close together at the western end of Europe. What about those travelling to the rest of Europe. I don't know many people who want to fly over their destination (figuratively) fly for a couple of hours, connect and then fly another couple of hours back again

I suppose MH also flies to IST but I agree that that still leaves a big gap inbetween in Eastern Europe.

QF potential partners

AY, flies to BKK, HKG, SIN and PVG for connections with QF. 45 destinations in Europe from HEL, though still has the double connection/stop issue as BA via LHR
AB, can connect with QF at FRA (currently). ~100 destinations in Europe/north Africa, although many are seasonal and no premium classes on short haul flights.
IB, ~40 destinations in Europe, though doesn’t fly to Asia and has no reasonable connection points with QF currently. MAD has same over flight problem as LHR.
RJ, currently connects with QF in BKK and HKG. 50 destinations in Europe/north Africa/middle east, though not all are daily.
QR, has flights to MEL and PER. ~50 destinations in Europe/north Africa/middle east.
CX, connects with QF in HKG, MEL, SYD, ADL, BNE, CNS, SIN, BKK and PER. 10 destinations in Europe/north Africa/middle east. CX hates QF...

QF would likely be better off getting a deal with QR instead of EK and starting some codeshares with AB.

Completely agree with Dave Noble on this one.
I cannot see what EK will get out of this, except may be eliminate a competitor, and I hope that the relationship does not pan out.

My thinking precisely.

That CX is not as strong in Europe is a good argument to partner with Emirates. Dubai has great connections into Europe

As far as what LHR can do, a big issue I see is that there are a lot of other places in Europe where passengers may want to go to ; going via London to get to places like Rome, Athens etc is not exactly a great choice; Dubai gives a nice connecting point to avoid overflying ones destination.

I see lots of benefits to Qantas with an arrangement with EK, but have trouble seeing what great benefits EK gets out of the deal

Qantas is an airline in its own right; any alliance membership should not work to detriment of itself ; if having to worry about what other airlines think when trying to improve ones own position would suggest to me that the alliance is perhaps something not to be a member of

For sure DXB has great connections. But all this will do is allow EK to poach QF most premium and loyal flyers into Europe. That's why I think (not know, I understand I am being armchair CEO here) that working with an airline like QR would be much better as QR could be integrated with other oneworld alliance partners, such as CX.

A QF/EK partnership will be just that, a QF/EK partnership.

QF should partner with CX (I have mentioned several reasons before, plus these new ones).

- A SYD/MEL-HKG flight can use one aircraft per day, whereas a LHR flight requires 3 (even DXB requires 2).
- CX is not as strong in Europe, and can stand to gain from additional feeder traffic (to perhaps allow CX to increase their FRA services for example).
- Middle Eastern connections available via HKG with J/W/Y product (to DXB, AUH, BAH, RUH, JED) - also to AMM on RJ.
- If QR joins oneworld, they have very strong operations out of BKK, HKG, SIN and member-elect MH hub in KUL. QF could then do a JBA with QR and BA without jeopardising the relationship with existing partners.

CX is in the same boat as EK in my view.
CX already flies to most Australian ports, and with higher frequencies than QF, so what does QF bring it...
I'm sure QF would have loved to have more codeshares / rev shares with CX, and also likely that they wanted them involved in low cost ventures in HKG...
I suspect they got told where to jump.

Emirates 1st destination was Melbourne ( DXB-SIN-MEL ) and they were running this in the 1990s

Dave

Uppppps... You are right! My memory is playing dirty tricks with me. OK - PER was the first non-stop AU destination served from DXB;)

I still think SQ and QF are the best fit, they are both premium++ airlines, good culture fit, together control so much capacity into AU which gives them some badly needed pricing power.. and both stand to lose massively from the success of middle-eastern carriers. SQ has decent routes into Europe, not as many as EK but I think enough for what QF needs. But I think SQ would need carrots from the Aust govt if it were to play ball... they have been knocked back so often before.

Aren't SQ still looking to fly the Oz east coast to US west coast route? This is the one thing they have been consistently knocked back on.

Aren't SQ still looking to fly the Oz east coast to US west coast route? This is the one thing they have been consistently knocked back on.

That route is no longer the cash cow it was before.

fThat route is no longer the cash cow it was before. Correct - a few years back when SQ wanted rights, there were only two carriers, UA and QF, with UA having two flights daily and QFfour (plus an additional flight via AKL). Now there are four carriers, with an extra two flights a day, and when you factor in HA via HNL and NZ via AKL there is an oversupply on this route, can't see SQ being interested now.

Dave

I still think SQ and QF are the best fit, they are both premium++ airlines, good culture fit, together control so much capacity into AU which gives them some badly needed pricing power.. and both stand to lose massively from the success of middle-eastern carriers. SQ has decent routes into Europe, not as many as EK but I think enough for what QF needs. But I think SQ would need carrots from the Aust govt if it were to play ball... they have been knocked back so often before.

I'm surprised you say QF and SQ have similar cultures...The corporate cultures of QF and SQ seem very different to me. Both corporate cultures have good points and weak points but they are quite different.

CX is in the same boat as EK in my view.
CX already flies to most Australian ports, and with higher frequencies than QF, so what does QF bring it...
I'm sure QF would have loved to have more codeshares / rev shares with CX, and also likely that they wanted them involved in low cost ventures in HKG...
I suspect they got told where to jump.


That's the point why this potential partnership has not worked - CX would be good for QF, but QF have very little to offer CX, particularly when CX already offers so many frequencies into so many Australian cities.

QF potential partners

AY, flies to BKK, HKG, SIN and PVG for connections with QF. 45 destinations in Europe from HEL, though still has the double connection/stop issue as BA via LHR
AB, can connect with QF at FRA (currently). ~100 destinations in Europe/north Africa, although many are seasonal and no premium classes on short haul flights.
IB, ~40 destinations in Europe, though doesn’t fly to Asia and has no reasonable connection points with QF currently. MAD has same over flight problem as LHR.
RJ, currently connects with QF in BKK and HKG. 50 destinations in Europe/north Africa/middle east, though not all are daily.
QR, has flights to MEL and PER. ~50 destinations in Europe/north Africa/middle east.
CX, connects with QF in HKG, MEL, SYD, ADL, BNE, CNS, SIN, BKK and PER. 10 destinations in Europe/north Africa/middle east. CX hates QF...

QF would likely be better off getting a deal with QR instead of EK and starting some codeshares with AB.


EK is already so strong in Australia that it does not really need QF. The possiblity of being able to steal QF's frequent flyer passengers must appeal to EK however, especially when they are being offered up by QF should this partnership come about. I am guessing EK may also want a code-share on trans-pacific flights so you could fly RTW on an EK ticket.

The best partner for QF in the ME would have been Etihad, which they HAD but QF let the partnership slip from their grasp. Etihad had the multiplicity of connections through the Middle East, but unlike EK was not as strong in Australia and were not already successful without QF. The Irish CEO was quoted at the time that they are commited to their BA partnership. But this was only about 2 years ago - could he not see the trend in the industry towards ME hubs. What are these people paid so much money for?

I still think SQ and QF are the best fit, they are both premium++ airlines, good culture fit, together control so much capacity into AU which gives them some badly needed pricing power.. and both stand to lose massively from the success of middle-eastern carriers. SQ has decent routes into Europe, not as many as EK but I think enough for what QF needs. But I think SQ would need carrots from the Aust govt if it were to play ball... they have been knocked back so often before.

Badly needed pricing power?
Tickets from Australia to Europe or the US are already ridiculously expensive, compared with tickets from Europe to Australia and, regarding Oz to US, compared with tickets from Europe to destinations 7000mi away.
If there is anything I do not want then it's more pricing power for tickets from Australia.

The Irish CEO was quoted at the time that they are commited to their BA partnership. But this was only about 2 years ago - could he not see the trend in the industry towards ME hubs. What are these people paid so much money for?What's his supposed Irishness got to do with it?

And why generalise about "these people"? The good ones undoubtedly earn their keep, and more.

The fact that the current QF CEO isn't good at his job is personal to him, and has nothing to do with his national origins.

I cannot see what EK will get out of this

Depending on the precise nature of the partnership, they get access to two of QANTAS' key assets - their frequent fliers and their extensive domestic network, which will increase competition with Etihad and Virgin.

http://www.chinapost.com.tw/business/middle-east/2012/07/31/349411/Qantas-should.htm

Gotta love the wheeling and dealing QF may be involved in ;)

The heading should be ... Dubai is desperate ...or more aptly QF's final days - yet more dumbass actions and strategies .

Asia Nervous ? Nah.

EK is already so strong in Australia that it does not really need QF. The possiblity of being able to steal QF's frequent flyer passengers must appeal to EK however, especially when they are being offered up by QF should this partnership come about. I am guessing EK may also want a code-share on trans-pacific flights so you could fly RTW on an EK ticket.

The best partner for QF in the ME would have been Etihad, which they HAD but QF let the partnership slip from their grasp. Etihad had the multiplicity of connections through the Middle East, but unlike EK was not as strong in Australia and were not already successful without QF. The Irish CEO was quoted at the time that they are commited to their BA partnership. But this was only about 2 years ago - could he not see the trend in the industry towards ME hubs. What are these people paid so much money for?

Mr B and Mr H have a prior relationship. Same cant be said for AJ.

Had QF done the right thing and put Mr B on the board, we would have been having a very different conversation. QF would have a relationship with EY and I suspect EY would be heading towards Oneworld.

Had QF done the right thing and put Mr B on the board, we would have been having a very different conversation.This will forever be one of the great "What if?" questions in my life!

Had QF done the right thing and put Mr B on the board, we would have been having a very different conversation. QF would have a relationship with EY and I suspect EY would be heading towards Oneworld.Does anyone have a time machine?