A couple of days ago Qantas announced their biggest airline partnership yet, whereby they’re entering a 10-year agreement with Emirates. This comes at the expense of their joint business with British Airways, which they’re terminating as of March 31, 2013.
The practical implications here are that Qantas currently has daily Airbus 380 service from from Melbourne and Sydney to London via Singapore (I flew this service last year), and will instead be routing those flights via Dubai. In the past most passengers took the Melbourne/Sydney to London flights all the way through and connected on British Airways from there, though I suspect with the new partnership a lot more passengers will be getting off in Dubai and taking a connection on Emirates straight to their final destination in Europe, the Middle East, and Africa.
This will come at the expense of Qantas’ Singapore hub, as they’ll now just be focused on operating flights directly between Australia and Asia, as opposed to having them for the purposes of connections. They’ll also be dropping their Singapore to Frankfurt service as of next year.
Lastly, Emirates’ and Qantas’ frequent flyer programs will be aligned and reciprocal benefits will be offered, though we don’t know to what degree yet.
I find this decision really interesting. For the past 10+ years we’ve seen the airlines largely dump partnerships in favor of alliances. That’s not to say there aren’t still partnerships (like what United has with Qatar, American has with Etihad, etc.), but usually only to fill gaps that the alliance can’t. Here we’re seeing an airline more or less dump their alliance partner in favor of another airline.
Given the size of this partnership it really makes me wonder what the implications are for alliances. Even after giving it some thought for a couple of days, I have no clue which way this could go. Long term could it mean Qantas will be leaving OneWorld, Emirates will be joining OneWorld, or Qantas/Emirates will eventually form a fourth alliance? Could this add pressure to Qatar/Etihad, causing them to join one of the major alliances, given that they don’t have partnerships as strong as the Qantas/Emirates one? I think it’s anyone’s guess how this plays out and whether this is good or bad for consumers. I think the one obvious conclusion is that both Qantas and Emirates are trying to drive up fares on their Australia routes, so they hope this will allow them to raise prices long term.
While it’s minor in the grand scheme of things, here’s one thing I’m excited about — Qantas will be operating at least twice daily Airbus 380 service between Dubai and London, so it should be easy to include them on a OneWorld award ticket. I suspect award space will be relatively easy on that flight given that most people flying Melbourne/Sydney to Dubai will likely be connecting on Emirates, largely leaving the tag flight open to passengers originating/terminating in Dubai. Given that the only other OneWorld airline to operate the route is British Airways, and they impose huge fuel surcharges on award redemptions, that’s a pretty great addition.
The days of Oneworld and Star are numbered. The Emirates/Qantas is a partnership and is a closer interlocking agreement than an alliance. By now you will have heard about American Airlines also becoming involved and just one other to come! American has been adopting a lot of the Qantas procedures and how to screw it's FF, after all they made 550Mill from their FF last year this is a big draw card to other airlines....
The days of Oneworld and Star are numbered. The Emirates/Qantas is a partnership and is a closer interlocking agreement than an alliance. By now you will have heard about American Airlines also becoming involved and just one other to come! American has been adopting a lot of the Qantas procedures and how to screw it's FF, after all they made 550Mill from their FF last year this is a big draw card to other airlines. Been pushing this for some years now oh and Qantas and Emirates have been arch enemies in this part of the world for some time after all Emirates is run by an Aussie. The concern is Singapore airlines as 40% of their profits and 25% of their passengers are from Australia.
Lucky it's not about Emirates/Qantas raising fares, the Kangaroo route is one of the most over serviced long haul routes in the world. The A380 was launched by Emirates on the Kangaroo route, Thai A380 Sydney first not Heathrow.
Australia has a small population (23mill)but:
12% of the population holidayed overseas (not including Business). Mercedes, BMW, Audi rank Australia as a premier market about 15% of car sales. Let's not go into the cost of housing. If the American market had those sort of percentages!!!
One of the biggest complaints the alliances have is their FF want the same standard over all airlines, not possible. So if you are customer focused you partner with airlines that offer the same level of standards. You are seeing the start of the worlds first premier alliance. The other new one is Asian based and it ain't Singapore airlines look who has the longest association with Qantas!!! Oh a Luxe alliance (AA will be the Cinderella)and the name late 2013!!
Thought this article was interesting... Hopefully I will one-day be able to book EK first class suites using my AA miles!
http://aviationblog.dallasnews.com/2012/09/emirates-president-emirates-and-american-airlines-in-codesharing-talks.html/
Etihad already has partnerships like this, one with Virgin Australia (which Qantas lobbied against hard when it was announced about 18 months ago) and with oneworld member Air Berlin (in which it owns a stake). BA are also lobbying hard to have Qatar join oneworld (http://centreforaviation.com/analysis/qantas-and-emirates-to-codeshare-in-first-alliance-shakeup-of-the-season-next-qatar-into-oneworld-81650) which makes the Middle East a complicated situation for oneworld.
Etihad already has partnerships like this, one with Virgin Australia (which Qantas lobbied against hard when it was announced about 18 months ago) and with oneworld member Air Berlin (in which it owns a stake). BA are also lobbying hard to have Qatar join oneworld (http://centreforaviation.com/analysis/qantas-and-emirates-to-codeshare-in-first-alliance-shakeup-of-the-season-next-qatar-into-oneworld-81650) which makes the Middle East a complicated situation for oneworld.
Lucky, the clear approach that appears to be taken is that QF will stay in oneworld but will have a major partnership with EK. The net result is that QF now have less oneworld benefits that they have to give out (as more flying by EK) but their members retain benefits. Given QF's problems at the moment the last thing they will do is try and further alienate their top frequent flyers by leaving oneworld.
*have LAN and AA
Qantas has already stated that they do not have any plans to leave oneworld. I suspect Malaysian will be their big partner in Asia when they join oneworld and kuala lumpur will be their big hub. Keep in mind that Qantas had LAN and AA as their partners and uses Santiago/Dallas as their sth/nth American hubs.
The BA partnership really was more of a hindrance than anything as it required connection through Hell-throw
This is the fist brilliant move by Qantas in a long time and may save their longhauls.
@ Narayana S -- Not just that, but the partnership is indefinitely suspended.
Middle eastern airlines the like of Emirates,Etihad,Qatar are absolutely not interested in joining any alliance,when you see their expansion,you can understand they can do without joining any of the 4 groups,beside Dubai is a better hub than singapore regarding mideastern,african and even european connection,finally Emirates and Qantas operates a380 while British airways is still delaying its first delivery.
Lucky with respect to US air and Qatar - isnt there a caveat with respect to being able to use US air on Qatar business or higher?
- narayana
@ Dave Op -- I'd say them both joining OneWorld would be the best for US based travelers since it would offer the most benefits.
Lucky,
Qantas is now in OneWorld alliance. Emirates is not in any alliance. What would benefit U.S. travelers the most, assuming the travelers plan to use award miles for flying?
1) Emirates joins OneWorld. So, both of them in OneWorld.
2) Both join Star Alliance.
3) Both join SkyTeam.
4) Some other combinations.
The United-Qatar partnership ends next week, leaving US Airways the only US airline that Qatar is aligned with...
@ Susan -- The details of the mileage reciprocity agreement haven't been announced yet. Also keep in mind you can't transfer US Membership Rewards points to Qantas as of now.
great analysis. With the pending AA-USAIR merger, who knows where One World will be come March 2013
So, could AMEX MR points be transferred to Qantas and then used for award travel on Emirates?
@ Dave Op -- Sorry, which alliance would benefit travelers the most as far as which airline goes? I doubt we'll see Qantas switch alliances and I doubt we'll see Emirates join OneWorld, so I think the two most practical options are either Qantas leaving OneWorld or Qantas and Emirates creating a fourth alliance.
Ben,
From the view point of U.S.A. based travelers using frequent flyer miles, which alliance would benefit the travelers the most? Which alliance would benefit the Qantas/Emirates the most?