expects that its new alliance with Emirates will help bring its ailing international unit back to profitability, as the carriers plan to broaden an initial code share deal into a revenue-sharing partnership on some routes.
The two airlines intend to start code-sharing in April, at which time Qantas will move its stopover point for its London flights from Singapore to Dubai. This will also allow Qantas to connect to 33 European destinations on the Emirates network via Dubai. The airlines will link their frequent flyer programs.
In addition, the carriers are expected to file an interim application with Australian regulators to allow schedule and pricing coordination. They are also seeking to revenue-share on Australia-Dubai-London trunk routes, AviationWeek has learned. The goal is for interim approval to be obtained in time to introduce these elements when the code-share begins in April, but they may have to be added later.
There is no equity investment involved from either airline, and Qantas CEO Alan Joyce describes the deal as a “partnership of independent peers.” He says this is the largest agreement with another carrier that Qantas has ever made.
The commercial agreement will give the two airlines 98 weekly flights to Dubai from Australia’s five largest cities. They will also have a combined 10 flights per day between Dubai and London, most with.
As well as the Europe routes, Qantas will code-share on Emirates services to Africa and the Middle East, and they will coordinate on flights between Australia and Southeast Asia. Emirates will gain access to the Qantas Australian network.
In the New Zealand-Australia market, which both carriers serve, they will initially code share but will apply to coordinate schedules. They have yet to decide if they will seek to revenue-share on these routes.
The new agreement allows Qantas to cut its flight to Frankfurt via Singapore, which was the only destination it served in Continental Europe with its own aircraft. Joyce says this route was “struggling for some time and withdrawal … was inevitable.”
However, Joyce says the arrangement with Emirates could eventually enable Qantas to puton new routes to Europe via Dubai. Overall, Joyce says the Emirates deal as a key element in returning Qantas’s international operations to growth in the long term.
A major casualty of the Qantas-Emirates tie-up is the Qantas-joint services agreement (JSA). Under this arrangement, which has been in place for 17 years, Qantas and BA partnered on their respective flights between Australia and the U.K. via Singapore. Qantas could access BA flights to Europe beyond London, but these were two-stop flights for Australian travelers.
Joyce says that “the time is right to wind up” the JSA with BA. It will finish on March 31. The carriers are also ending their arrangement that allowed Qantas and BA to connect to each other’s flights in Hong Kong and Bangkok, which was an alternative route between Australia and the U.K.
Qantas remains committed to the Oneworld Alliance, despite ending the JSA with BA, Joyce says. Emirates President Tim Clark, meanwhile, stresses that the Qantas agreement does not change his carrier’s policy of staying out of alliances.