Emirates and Qantas send mixed signals with new moves

13 September 2017

Partnership has fuelled growth for both airlines over the past five years

Emirates Airline and Qantas marked the extension of their five-year partnership with reciprocal and ironic moves.

Starting March 2018, Qantas will switch the stopover for its Sydney to London service back to Singapore’s Changi International airport, after five years of routing it through Dubai.

For its part, Emirates will add an extra flight to its three daily services between Dubai and Sydney from the same month next year.

Emirates’ move is clearly designed to compensate for the potential loss of passengers who would prefer to break their long journey in Singapore rather than in Dubai.

Deploying an A380 on the fourth daily flight to Sydney will increase Emirates’ current capacity by more than 6,000 seats a week, the same number of seats analysts say it could potentially lose as a result of Qantas’ decision to move back to Singapore, as well as an earlier plan to route its Melbourne to London flight through Perth rather than Dubai.

It should be noted that the extended partnership sees the two airlines operating in totally different environment compared with 2012, when the tie-up first began.

In 2012, Qantas’ international operation was bleeding with the airline reporting an annual loss estimated at $450m that year. Emirates also needed access to Qantas’ customer base and domestic network, as part of its rapid expansion strategy in the Asia-Pacific region.

Over the past five years, the partnership undoubtedly helped both airlines overcome key weaknesses.

Qantas generated $327m profit in 2016, with some analysts indicating that its Dubai hub played an important role in its remarkable turnaround.

Emirates now flies 77 weekly flights to five major Australian cities that include Sydney, Melbourne, Brisbane, Perth and Adelaide, and this is set to increase to 91 by March 2018.

Both airlines say the recent moves are designed to give passengers on some of the world’s longest and busiest flight routes more choices.

It is probably another way of saying they need each other less now than when the partnership started five years ago.

Nevertheless, it is also not difficult to imagine that that the decision to trim down Qantas’ services in Dubai is mutual. Afterall, Emirates needs the vacated slots to sustain its growth, especially if the expansion of Dubai’s second airport, Al-Maktoum International, faces delays.

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