Travel News

Flying circus?

Qantas’s deal with Emirates could save the Aussie airline or make it a mere sideshow, says aviation writer Clive Dorman.
Tom Bingham

The market research makes it sound as though it’s going to be a pushover. But the Qantas-Emirates alliance, one of the biggest deals in aviation, is a huge leap into the unknown. Just how far does loyalty extend? Will Europe-bound flyers accept difficult Dubai connections in exchange for avoidance of London Heathrow? Or will it deliver a free kick to operators in Asia, including British Airways and Cathay Pacific (who have just struck a new codesharing arrangement for Australia) and their one-stop trips to the continent?

Surely this is the million-dollar question for chief executive Alan Joyce as the first Qantas A380 takes off for the Gulf on 31 March. If it doesn’t perform as advertised, the alliance will simply succeed in reducing the Australian brand to the status of booking agent and feeder network for the Emirates juggernaut, the world’s biggest international airline.

And, on the face of it, that is what it will do. Qantas has confirmed Emirates won’t alter its timetable for arrivals and departures at Dubai to improve connections for Qantas passengers. Qantas will simply divert its two daily London A380 services from Melbourne and Sydney to stop over in Dubai instead of Singapore to take advantage of existing early-morning London Heathrow arrival “slots” – commodities that are bought and sold for up to $20 million per takeoff-and-landing pair.

Those flights will transit in Dubai at about midnight local time, but won’t connect with the big morning “wave” of Emirates onward flights to its 33 European destinations – one of the loudly touted benefits of the alliance.

For the fastest connections, Qantas customers will take later Qantas-codeshared Emirates services from all the major Australian cities, timed to arrive in Dubai at about dawn. Either that or they will take advantage of fast one-stop connections via Asia with Qantas’s key competitors, such as Singapore Airlines, recent Oneworld inductee Malaysian Airlines, Cathay Pacific and British Airways.

However, Qantas’s extensive market testing – 2000 travellers questioned by Acuity Research in August and a further 500 questioned after the September announcement of the Qantas-Emirates alliance – suggests that not only is the alliance popular, but Dubai rates as well as South East Asian cities as a stopover. According to the research, Singapore is rated the best of the Australia-Europe transit stops (64 per cent of people are “quite interested” or “very interested”), but Dubai (61 per cent) was just behind with Hong Kong (60 per cent). Abu Dhabi (45 per cent), Shanghai (34 per cent), Kuala Lumpur (33 per cent) and Bangkok (33 per cent) lagged well behind.

In all, 75 per cent of those surveyed after the proposed partnership was announced thought it was “a good idea”; 13 per cent were unsure or “disinterested”, while only 12 per cent felt it was a “bad idea”. A total of 78 per cent said they were interested in the Qantas-Emirates partnership compared with 39 per cent for the Virgin-Etihad partnership, hubbed at Abu Dhabi just 140 kilometres from Dubai.

Then there are the lollies. Apart from the addition of the Emirates network as an earn-and-burn option for Qantas’s eight million frequent flyers, Qantas will introduce its Dubai Connect program, matching Emirates’ long stopover service in Dubai, which provides complimentary accommodation, transfers, meals and visa costs where connection time is greater than six hours and less than 24 hours for first and business-class passengers or greater than eight hours and less than 24 hours for premium economy and economy passengers, and where there is no earlier scheduled connection available.

For Australians, whose long-haul travels tend to be marathons compared with other world travellers, a single en route stop is a winner. After a flight of between 20 and 24 hours, the last thing an exhausted traveller wants is to change planes or even terminals at Heathrow in the early morning before a third flight to get to their destination.

Qantas says using Dubai as a sole stopover instead of using existing Qantas codeshares to continental Europe that double back from Heathrow will save three hours or more and typically about $100 in airport fees no longer added to the ticket price – although that “saving” can be illusory in the changeable landscape of frequent fare sales.

Both of Australia’s main airline groups now rely on virtual networks through codeshares and joint ventures with foreign carriers, and the Emirates gamble for Qantas is a make-or-break attempt to re-energise the long-haul brand after a run of bad years caused by the ailing northern-hemisphere economies, high fuel prices and, critics would say, poor management.

Since it launched Jetstar in 2004 to take over its unprofitable routes, Qantas has been shrinking its international operations. Two years ago it had five daily flights to Europe; soon it will have just two.

Joyce has stuck doggedly to a plan to get the international division back into the black, cancelling A380 and Boeing Dreamliner orders, and, on the latest figures, he appears to be succeeding. “Over the long term I see our partnership with Emirates as a platform for growth,” he says. “It is far bigger than a codeshare. Or even a joint services agreement. This is the biggest arrangement Qantas has ever entered into with another airline.”

In the next months and years, travel consumers will have plenty to say about whether Joyce will be remembered as the man who saved Qantas International – or killed it.

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