Australian national carrier Qantas and fast-expanding Gulf operator Emirates Airline have announced a new global aviation partnership that goes far beyond a traditional codeshare arrangement. The ten year agreement which comes into force in April 2013, will not see any equity swap between the carriers but will include integrated network collaboration with co-ordinated pricing, sales and scheduling as well as a benefit-sharing model.
The new partnership with Emirates Airline marks a change in direction for the Australian carrier and will help it enhance its international network and will see the end of an 18-year commercial cooperation with British Airways (BA). The joint business agreement with the International Consolidated Airlines Group (IAG) subsidiary was established in 1995 but will now end from March 31, 2013. Qantas confirms it will continue to cooperate with BA as part of the oneworld global alliance and through bilateral codeshares.
“Over the past 17 years the joint business with British Airways has been central to the Qantas network. However, global operating conditions have changed and partnership with Emirates is the right strategy for Qantas,” explained Alan Joyce, Chief Executive Officer, Qantas.
According to IAG Chief Executive, Willie Walsh, the airlines are leaving “on amicable terms” and that the decision “fits in” with changes in its global strategy. “Asia has become a key market focus for IAG and we’re talking to a number of airlines about alternative options for us,” he added.
As part of the groundbreaking decade-long partnership with Emirates, Qantas will move its hub for European flights from Singapore to Dubai. It will end its Frankfurt service, which has been “underperforming for some time,” according to the carrier, but will continue to offer flights from both Sydney and Melbourne to London Heathrow via Dubai International Airport, where it will become only the second tenant at Terminal 3, the new purpose-built A380 concourse at the airport. Together Emirates and Qantas will offer 98 weekly services between Australia and Dubai and from April 2013 there will be seven Airbus A380 rotations a day between Dubai and London Heathrow.
The partnership will give Qantas customers one-stop access to more than 70 Emirates destinations in Europe, the Middle East and Africa, while for Emirates customers it will open up Qantas’ Australian domestic network of more than 50 destinations and 5,000 flights per week. The carriers will also coordinate on their services between Australia and New Zealand and services between Australia and South East Asia.
“This is the most significant partnership the Qantas Group has ever formed with another airline, moving past the traditional alliance model to a new level. It will deliver benefits to all parts of the Group,” explained Alan Joyce.
“Together with Emirates, Qantas will provide a unique ‘one stop’ hub service, as well as deeply integrated frequent flyer and customer benefits and there will also be considerable benefits for the broader economy as we collaborate with industry to drive more inbound trade and tourism,” he added.
According to Alan Joyce, the partnership delivers on all four pillars of the Qantas Group’s international strategy. “It will see us fly to the global gateway city of Dubai, provide some of the world’s best travel experiences through both Qantas and Emirates, improve our network in Asia, and, crucially, help build a strong Qantas International business for the long term.”
The switch of regional hub from Singapore will allow Qantas to better serve the market. In the past its schedules to Singapore and Hong Kong were timed to optimise travel through to Europe. These will now be retimed to offer an improved schedule dedicated to better meet the needs of the Asia market.
“We currently have an Asian flying schedule based on travelling via Asia to Europe, but our Australian business customers want better access to Asia, and we have been looking to address this for some time,” said Alan Joyce. “With European services transiting through Dubai, Qantas’ Asian services will no longer be a subsidiary of the ‘Kangaroo Route’ and instead they will be dedicated to connecting Australians with our region, and Asian visitors to Australia.”
The arrangement will further strengthen Dubai International Airport’s position as one of the world’s leading aviation hubs. In the past week the airport has revealed passenger traffic during the first seven months of 2012 reached 32.93 million, up 12.4 per cent over the same period last year. Emirates and Qantas will work together to develop a seamless customer experience in Dubai, including mutual lounge access, shared use of Emirates’ unique dedicated A380 facility slated to open in early 2013.
“The time was right for developing a long term, future forward partnership with Qantas, the iconic Australian airline,” said Tim Clark, President of Emirates. “Since our first flights began in 1996, Australia has long been a popular destination for Emirates leisure and business travellers, making it one of the top three destinations in our network.”
Qantas and Emirates will now submit applications for authorisation to the Australian Competition and Consumer Commission (ACCC) and other relevant regulatory authorities, in order to begin commercial planning. Subject to regulatory approvals, it is anticipated that the partnership arrangements will take effect in April 2013.
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