Emirates and Qantas will apply to extend their partnership for another five years in a move that will see Qantas ditch Dubai as a stopover on its London flights and return to Singapore.
The move is designed to improve fleet utilisation and capitalise on the fast-growing Asian market by increasing capacity to Singapore.
It will also free up an Airbus A330 aircraft to fly to a new Asian destination.
The Australian carrier will re-route its Sydney-London A380 super jumbo service via Singapore and upgrade its existing Melbourne-Singapore flight from an A330 to an A380 from March 25.
The flights will join services from Brisbane and Perth to connect with partners in Singapore, including Jetstar Asia, as part of what Qantas International chief executive Gareth Evans said was “a laser focus on Asia’’.
The renewal, which is subject to regulatory approval, will see Qantas passengers given the choice of hubbing through Perth, Singapore or Dubai on trips to Europe.
They will still be able to fly to Europe via Dubai using Emirates’ 77 weekly services to Adelaide, Brisbane, Melbourne Perth and Sydney. These include seven daily A380 flights.
Qantas premium customers in Melbourne, for example, will have the choice of first class service from Melbourne to London flying Emirates via Dubai or by using the Qantas Melbourne-Singapore A380 service and connecting to the Sydney-London flight.
Alternatively, they can take a quicker business class flight on the new ultra-long-haul Boeing 787 service via Perth when it replaces the Melbourne-Dubai-London flight in March.
“It means more choices,’’ Qantas Group chief executive Alan Joyce told a press briefing.
Qantas said the changes would give it an estimated annualised net benefit of more than $A80 million from the 2019 financial year.
Evans said the gain was primarily revenue driven and included the benefits of new traffic flows between Singapore and London as well as London and other Asian destinations over Singapore.
There were also costs savings around crew, scheduling and fuel as well as benefits from freeing up the A330.
QANTAS CONFIDENT OF STRONG CASE
The heads of both airlines lauded the partnership as a success with Joyce noting that the number of people flying to Europe on the Qantas code had tripled from 400,000 annually prior to the partnership to 1.2 million today.
Joyce said the partnership was worth well over $A1 billion and both carriers had seen significant increases in demand.
He said each carrier brought unique assets to the partnership: Emirates with its Middle Eastern and European network and Qantas with its network in Oceania.
The partnership had also allowed the Qantas international business to return to profitability and had strengthened its domestic and loyalty businesses, with frequent flyer redemptions in Emirates’ premium classes up 40 per cent last year.
“This alliance has been a big success for both airlines and a big success for shared customers,’’ he said. “Frankly it was a no-brainer to keep it going.”
Despite the decision to switch to Singapore, Joyce said Dubai was still “a great hub” for Qantas passengers and it would continue to grow.
The Qantas chief said changes in aircraft technology meant Qantas would eventually fly a handful of direct routes to Europe — he has indicated these will be London, Paris and a third destination likely to be in Germany — but this would not overtake the range of destinations served by Emirates.
He noted the number of Emirates destinations in Trope had increased over the first five years of the partnership from 30 to more than 40.
“The reality is the majority of Qantas customers travelling to London fly out of Australia on Qantas metal and the majority of Qantas customers flying elsewhere in Europe fly out of Australia on Emirates metal,’’ he said.
“This is how the partnership has evolved and we’re very happy with that. So what we’re doing is giving Qantas customers the best of all worlds.’’
He was also confident the partners had a strong case to put before the Australian Competition and Consumer Commission based on the benefits of last five years and the increase in competition on “kangaroo routes” to Europe.
“We think there’s an even stronger case today than there was five years ago but certainly we won’t be complacent and we’ll be putting our best foot forward to persuade the regulators about that,’’ he said.
NEW EMIRATES CONNECTIONS
Emirates president Tim Clark said the Dubai carrier had worked with Qantas on the network changes.
“We see an opportunity to offer customers an even stronger product proposition for travel to Dubai, and onward connectivity to our extensive network in Europe, Middle East and Africa,’’ he said. “We will announce updates in the coming weeks.
“Customers of both airlines will continue to benefit from the power of our joint network, from our respective products, and reciprocal frequent flyer benefits.”
Qantas has made a string of announcements since unveiling its second biggest underlying pre-tax profit last week.
They include a challenge to aircraft manufacturers to develop “hub-buster” aircraft capable of flying directly from Sydney to London and New York as well as a decision to establish a Boeing 787 base in Brisbane capable of widening the airline’s reach in North America.
Qantas is also poised to reapply to US regulators and attempt to get a decision against its partnership with US giant American Airlines overturned.