Comment: Qantas enters new era

Comment: Qantas enters new era
By admin


As QF1 departed Sydney for Dubai shortly after 5pm on Sunday, with Qantas chief executive Alan Joyce and Emirates president Tim Clark among its passengers, it ushered in a new era for the Flying Kangaroo and, indeed, for Emirates.

Almost a year after initial talks began at Wolgan Valley Resort in the Blue Mountains, the alliance formally kicked off with both parties reporting encouraging bookings for the combined operation.

It seems fitting that the eco resort should have been the venue for those early discussions back in May 2012. Hosting Qantas management at a luxury property which it owns and operates seems indicative of the widely held assumption that the Dubai carrier is the senior partner in this relationship.

It was billed as the coming together of equals — and that may be the case in many aspects of their operation — but there can be little doubt that Qantas needed Emirates more than Emirates needed Qantas.

Should this partnership fall apart, and there is nothing suggest it will, Qantas will be back to square one in its quest to shore up its international network while Emirates will continue on its happy trail of expansion.

Combined, the two carriers will operate 98 weekly flights between Australia and Dubai. Yet of those, a mere 14 will be on Qantas metal. Only from Sydney and Melbourne will Qantas operate direct A380 services to Dubai and onwards to London. The rest — 84 flights — will be operated by Emirates which services Brisbane, Perth and Adelaide in addition to Sydney and Melbourne.

Qantas will still fly to Asia from most state capitals. But travel to Europe and the UK from Queensland, WA and South Australia with the national carrier and you'll be on an Emirates B777 or A380.

In much the same way that Virgin Australia has built a virtual network through alliances with Singapore Airlines, Etihad, Delta and Air New Zealand, so Qantas has been forced to do likewise. Geography being what it is, and with Australia an end-of-line destination, neither carrier had much option. Building extensive networks on a scale demanded by business travellers in particular was only ever achievable through collaboration with others. Any suggestion to the contrary is folly.

In Hangar 96 at Sydney Airport on Sunday ahead of the Qantas inaugural flight to Dubai, and at Emirates HQ in Dubai the following day, Joyce and Clark indulged in some momentous back slapping. And transport minister Anthony Albanese can rarely have felt more popular as both airlines bosses heaped praise on the government for its support and even handed approach.

Such congratulatory sentiment is the norm on such occasions, and can be excused. For Joyce, this alliance will be his legacy. It is his central pillar to hauling Qantas International back into the black and is likely to shape the airline's destiny for years to come.

While the competition regulator may have rejected Qantas's "terminal decline" argument as it sought to win approval for the alliance, it is clear it could no longer operate in isolation. No carrier can do that anymore if it wishes to remain competitive — not even Emirates, a vocal opponent of global alliances.

Clark did not rule out similar collaboration in other parts of the globe.

Joyce and Albanese both spoke about the iconic nature of the Qantas brand and the airline proudly boasts its standing as the world's oldest continually operating airline.

Much has been said about the possible watering down of the Qantas brand as it waves goodbye to its position as a stand alone operation. It was not hard to detect an underlying message from Joyce and Albanese that there will be no Qantas if it did not go down this route. Joyce has expressed such a view explicitly on numerous occasions.

As it is, Qantas carries less than two out of every 10 international passengers departing Australia, so in many respects it has already lost its place as the airline and brand of choice among Australians. It was already being watered down by virtue of increasing competition from the Middle East, Asia and China. To do nothing purely to placate those who have an almost rabid nationalistic view of Qantas was not an option.

While Qantas will benefit from Emirates' international connections, Emirates will tap into Qantas's domestic network, which it is already doing successfully according to early results.

For Qantas International however, the launch of the Emirates alliances does not solve all its problems. Its Asian network remains limited – notwithstanding Jetstar Asia's expansion – and China must also be a focus.

There were celebrations and unbridled optimism in Dubai from both parties. But there remains much to do for Qantas and its chief executive.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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