The week in Focus

The week in Focus
By admin

It took a while, and there were a few false starts along the way, but Qantas finally got what it wanted and needed yesterday, a major airline alliance.

For some time now, Qantas chief executive Alan Joyce has been on a quest to forge partnerships as he strives to restore profitability to the international network.

Well now he’s got one, and a decent one too judging by the details of yesterday’s announcement.

Most critically, the alliance with Emirates will give Qantas deep reach into Europe, even if it is withdrawing from Frankfurt, its one and only continental European route.

It will also see Qantas’s codeshares with Air France into Paris and Cathay Pacific into Rome terminated, while its long-standing Joint Services Agreement with British Airways will also fall by the wayside.

But none of that will matter to Joyce.

Jumping into bed with Emirates will provide Qantas, and its millions of frequent flyers, with 33 European gateways via Dubai. Combine that with Emirates’ North Africa and the Middle East networks and the number of destinations rises to more than 70.

Virgin Australia saw the benefits of what has been dubbed a “virtual network” through the operations of others, and now Qantas has followed suit.

Emirates is quite obviously the dominant partner in the equation and concerns have been raised that Qantas will effectively be handing passengers to its alliance partner. No one can say Emirates does not have a quality product so those fears are not without foundation, even if Qantas is able to match the level of customer service offered by the Dubai-based carrier. It’s a risk it has no option but to take.

What is the alterative? To go it alone?

Australia is at the end of the world, competition is growing and the quality of those competitors is improving. You only have to look at the dwindling market share figures to know Qantas is already under intense pressure, and has been for years.

Emirates is unlikely to be the last alliance for Qantas. As promising as this deal may be, it does little to enhance Qantas’s Asia network.

Qantas is very unlikely be a global player again in its own right. Alliances are the only way to keep it on the world stage.

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