Aviation

Qantas and Alliance announce domestic tie-up, as Joyce says COVID-19 will be his last crisis

Qantas Group and Alliance Aviation Services have announced a new deal that will help the flying kangaroo meet an expected surge in local tourism demand once Australia moves beyond sudden COVID-related border closures.

Alliance will provide the QantasLink network with flexible capacity using its recently acquired Embraer E190 aircraft – a 94-seat jet with a five-hour, 4,500-kilometre range that is well-suited to linking regional centres with smaller capital cities.

The E190 offers 10 seats in business class and 84 seats in economy.

Initial routes that Alliance will fly are expected to include Adelaide-Alice Springs, Darwin-Alice Springs and Darwin-Adelaide.

Passengers can expect an increase in frequency made possible by the size, range and economics of the E190 compared to the Boeing 737s currently used by Qantas on these routes.

The 737s will be redeployed elsewhere in Australia as part an ongoing ‘right aircraft, right route’ approach to the group’s network, Qantas said.

The flying kangaroo has signed a three-year deal with Alliance to access three E190s based in Darwin and Adelaide.

Qantas said the timing will depend on the rate of recovery in travel demand, but is currently expected to start in June 2021, once the vast majority of the airline’s domestic flying has returned to pre-COVID levels.

The agreement also provides flexibility for Qantas to access an additional 11 (for a total of 14) E190 regional jets, but also to switch off some or all of this capacity, depending on market conditions.

An Alliance Embraer E190 aircraft

QantasLink CEO John Gissing said the deal reflected the kind of flexibility needed to respond to opportunities without committing any capital.

“We know this current climate of snap border closures will pass, and we want to be ready for the recovery and for what is a structurally different market to what we had pre-COVID,” he said.

“The ability to switch on extra capacity with Alliance will help us make the most of opportunities in a highly competitive environment, and having the right aircraft on the right route helps us deliver the schedule and network that customers want.

“The E190 is a perfect mid-size regional jet for routes like these ones in northern Australia. It has longer range than our 717s and it’s about half the size of our 737s, which means the economics work well on longer flights between cities and towns outside of the top five population centres.

“Instead of one or two flights a day with a larger aircraft, we can offer three or four flights a day on the E190, which gives customers in these cities a lot more choice about when they travel.

“We’ve worked with Alliance for many years and they have flown literally thousands of flights for Qantas over that time, with the same service and standards that customers expect when they buy a Qantas ticket.

Gissing said Alliance was keen to provide the opportunity for Qantas’ international pilots and cabin crew to operate the E190s while the overseas markets recover.

Alliance managing director Scott McMillan said: “This is an exciting transaction for Alliance and further extends on previous wet-leasing arrangements that Alliance has had with Qantas since 2012.

“This further cements Alliance as the pre-eminent wet-lease operator in Australia and the Pacific, and confirms Alliance’s view that the circa-100-seat regional jet will be the sweet spot in the global aviation market’s post-COVID-19 recovery.

“We look forward to providing Qantas with our renowned high-quality service and operational reliability.

“It is also pleasing to be able to provide new job opportunities in the Australian aviation landscape, as well as for our existing staff and potentially some Qantas Group staff who would normally be flying internationally.”

The deal is estimated to account for more than five per cent of Alliance’s overall revenue once the first three aircraft have been fully deployed.

Qantas acquired a 19.9 per cent stake in Alliance back in 2019, becoming the regional airline’s single-biggest shareholder. However, the deal is still under investigation by the Australian Competition & Consumer Commission.

COVID-19 to be my last crisis, says Joyce

Meanwhile, Alan Joyce has hinted that he may be starting to plan his eventual exit from Qantas, having led the company since 2008 after joining from Ansett Australia in 2000.

In a recent interview on Eurocontrol’s Aviation StraightTalk Live, Joyce said the COVID-19 pandemic would be the last crisis he navigates Qantas through.

“My boss, when I first started in Air Lingus, said one thing you have to get used to is [a] crisis every seven years,” he told journalist and Aviation Advocacy managing director Andrew Charlton.

“So, I’m not going to be here in 10 years’ time, because I’m not going to go through the next crisis.”

You can watch the interview in full below:

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