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Qantas and Emirates alliance moves closer

Qantas and Emirates alliance moves closer

Old Jul 30, 12, 3:32 am
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Qantas and Emirates alliance moves closer

It has been mentioned on here before but a Qantas/Emirates alliance seems to be moving ever closer according to UK and Australian financial press. e.g. Australian Financial Review:

"Qantas Airways is prepared to sever a 17-year partnership with British Airways as part of its effort to form an .alliance with the world’s biggest .international airline, Emirates.

A tie-up with Emirates will hurt Qantas’s relationship with .partners in oneworld, the powerful travel alliance of 11 .airlines it co-founded with British Airways in 1998.

The Australian flag carrier .confirmed yesterday it was in .discussions with Emirates, among “a number of airlines”, over an .alliance.

Sources close to the situation said management at Qantas has accepted that the long-standing BA relationship would be the price of any deal with the Middle Eastern carrier.

As reported exclusively in The Australian Financial Review yesterday, under the deal being discussed Qantas could shift some of its flights on the Kangaroo route to London from transiting via Singapore to the “Falcon route” via Dubai.

The news sent Qantas shares up 9.6 per cent to $1.085, the biggest gain on the ASX 100 Index.

The move by Qantas chief executive Alan Joyce is part of a strategy to shift the premium airline towards an international model based on alliances – a tactic first enunciated in this country by Virgin Australia’s John Borghetti.

Prime Minister Julia Gillard was caught on the hop when asked about the deal yesterday morning, saying Qantas would always remain majority Australian owned because of the limitations of the Qantas Sale Act.

By the end of the day, Canberra sources said the government would not intervene in a commercial .alliance that did not involve Emirates taking equity in Qantas – something that is not under .discussion.

The only relevant approval would have to come from the competition regulator. While the code-share deal with Emirates has not been finalised, both carriers are confident it will be completed in coming months.

A deal with Emirates is expected to jeopardise Qantas’s existing code-share agreement with British Airways, which along with American Airlines and Cathay Pacific were the other founders of oneworld in 1998.

The Australian flag carrier is increasingly less reliant on traditional links with airlines such as British Airways and Cathay Pacific, and more focused on potential tie-ups with the likes of Emirates, China Eastern and soon, it is expected, Chile’s Latam."
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Old Jul 30, 12, 3:45 am
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Slightly off topic, but what does the agreement between Australia and Germany look like. Would it allow QF to operate Australia-DXB-BER/STR just as the operate SYD-SIN-FRA today?

Otherwise, I'm all for this, my family still has many QF FF points and it looks like a win-win for both airlines, not forgetting Tim Clark's comments on Pacific services a while ago.
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Old Jul 30, 12, 3:52 am
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More can be found here, at these existing threads...
http://www.flyertalk.com/forum/qanta...rates-tie.html
http://www.flyertalk.com/forum/briti...es-tie-up.html
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Old Jul 30, 12, 4:06 am
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Originally Posted by MucEKPer View Post
Slightly off topic, but what does the agreement between Australia and Germany look like. Would it allow QF to operate Australia-DXB-BER/STR just as the operate SYD-SIN-FRA today?
I think that's missing the point.

If an Emirates/Qantas alliance were to proceed, it would almost invariably mean that Qantas would drop both of their European routes, with Qantas passengers for Europe being carried on Emirates services onwards from DXB.

Yes, I know that EK are not allowed to serve BER or STR, so this would still involve a short final hop on a local carrier. But think instead of the number of destinations in Europe that become reachable as one-stops from Australia.

But, I suppose, if EK really wanted access to BER, then perhaps switching the QF route to BER would be one possible way of doing this. I think it is unlikely, though...
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Old Jul 30, 12, 4:32 am
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The two outcomes I'm hoping for are:

- Earning Skywards when flying Qantas (or Jetstar - unlikely).
- Redeeming my Skywards points to upgrade a Sydney > Santiago or Sydney > Los Angeles flight.
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Old Jul 30, 12, 5:21 am
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I still don't see this resolving the BER situation. They will just transfer QF passengers onto an EK flight in DXB. EK will still have to obtain landing rights in BER and STR
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Old Jul 30, 12, 6:46 am
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I'm not sure I get the advantage of such a tie up. One stops from Australia to Europe are possible on EK anyway, so what's the advantage to EK? Is there a limitation on how many services they can operate to Australia? They don't seem to be near capacity anyway.

Is it that QF operated flights on SYD/MEL-LAX will have EK flight numbers?
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Old Jul 30, 12, 6:47 am
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Originally Posted by rowanparker View Post
The two outcomes I'm hoping for are:

- Earning Skywards when flying Qantas (or Jetstar - unlikely).
- Redeeming my Skywards points to upgrade a Sydney > Santiago or Sydney > Los Angeles flight.
If you could earn EK tier miles on QF, then that would alter my flying patterns considerably. That starts to become compelling...for me at least.

Last edited by eightblack; Jul 30, 12 at 8:21 am Reason: typo
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Old Jul 30, 12, 8:12 am
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From http://www.flightglobal.com/page/int...the-interview/

Clark says flying transpacific services between points in the Americas, Asia-Pacific and Australasia is “the only piece of the jigsaw that’s missing. We’re just getting into the start positions – we have the West Coast of the USA, we have Chinese points, we have Asian points, we have Australasian points. So the Pacific is encircled and the next stage is to link the dots – we have the rights.”

Clark says if he could have his way this phase of the Emirates strategy would be initiated “sooner rather than later”, but he recognises the timing is not quite right yet. “We need to consolidate our market presence in places like the USA. We need to be as understood in the USA as we are, for example, in Europe.”

------

That was last fall. Since then their USA destinations have nearly doubled (after including the IAD route starting this September).

This could be big, folks.
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Old Jul 30, 12, 8:25 am
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Originally Posted by ung1 View Post
I'm not sure I get the advantage of such a tie up. One stops from Australia to Europe are possible on EK anyway, so what's the advantage to EK? Is there a limitation on how many services they can operate to Australia? They don't seem to be near capacity anyway.
Indeed - there are lots of people flying one-stop from Australia on pure EK itineraries already. But EK is not the largest carrier out of Australia. And there are still lots of people flying from Australia on QF itineraries.

But put the two together, and QF/EK should be the largest carrier from Australia, and EK will have quite a considerable immediate uplift in the number of passengers connecting in DXB, and all those passengers that would instead perhaps end up on BA services to get to locations all around Europe will instead travel on EK metal.

Why wouldn't EK like that?



Image from CAPA, representing Australia international capacity by carrier (seats): 16-Jul-2012 to 22-Jul-2012

Last edited by irishguy28; Jul 30, 12 at 8:30 am Reason: Added image, corrected text
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Old Jul 30, 12, 9:41 am
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Originally Posted by irishguy28 View Post
Indeed - there are lots of people flying one-stop from Australia on pure EK itineraries already. But EK is not the largest carrier out of Australia. And there are still lots of people flying from Australia on QF itineraries.

But put the two together, and QF/EK should be the largest carrier from Australia, and EK will have quite a considerable immediate uplift in the number of passengers connecting in DXB, and all those passengers that would instead perhaps end up on BA services to get to locations all around Europe will instead travel on EK metal.

Why wouldn't EK like that?



Image from CAPA, representing Australia international capacity by carrier (seats): 16-Jul-2012 to 22-Jul-2012
You have a point, but then EK could also just grow, add frequencies and destinations in the Australian market, and capture that market share on its own. That seems to be their strategy elsewhere, organic growth instead of partnerships, so why change now?
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Old Jul 30, 12, 10:29 am
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The article in the Sunday Times (which I can't reproduce here because I don't subscribe!) said that one of the main reasons behind the move from the Qantas perspective was to shift a lot of their flights from landing at Singapore en-route to Europe to Dubai. This was as part of a huge cost cutting operation Qantas is undertaking.

Emirates are also meant to be flying into and out of Adelaide from November 1st.
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Old Jul 30, 12, 5:09 pm
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Wouldn't it be much easier for QF to use KUL instead of SIN if they were after lower fees?
I guess another advantage for EK would be that with the extra capacity from Australia, they could open and sustain a lot more routes to Europe. There is a lot of traffic to/from Scandinavia and Eastern Europe where a regular flight does yet have enough traffic...
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Old Jul 31, 12, 12:40 am
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Originally Posted by CAlex View Post
Wouldn't it be much easier for QF to use KUL instead of SIN if they were after lower fees?
I guess another advantage for EK would be that with the extra capacity from Australia, they could open and sustain a lot more routes to Europe. There is a lot of traffic to/from Scandinavia and Eastern Europe where a regular flight does yet have enough traffic...
I thought SIN had some of the lowest landing fees around. It's a nicer airport than KUL and DXB in any case.

Also if they wanted to use DXB as a stop over point instead, would they need a tie up with EK? I thought the UAE has an open air policy where any airline could do this.
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Old Jul 31, 12, 2:25 am
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Originally Posted by ung1 View Post
Also if they wanted to use DXB as a stop over point instead, would they need a tie up with EK? I thought the UAE has an open air policy where any airline could do this.
Precisely.

But the EK tie up will not just be about QF changing their stopover location. If it goes ahead, Qantas will not be flying past whichever stopover point they choose - EK would be the carrier onwards into Europe.
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