September 06, 2012
Credit: Photo: Airbus
Qantas 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 Airbus A380s.
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 put Boeing 787s on 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.