Struggling Australian airline Qantas Airways announced a major global alliance with Emirates yesterday that will involve moving its hub for European flights to Dubai from Singapore.
The 10-year tie-up, described as a “momentous day” in global aviation, is part of Qantas’s drive to turn around its fortunes after posting its first annual loss since its 1995 privatisation last month.
Subject to regulatory approval, it goes beyond code sharing to include co-ordinated pricing, sales and scheduling and a benefit-sharing model, although neither airline will take equity in the other.
The alliance prompted Qantas and International Airlines Group, which includes British Airways, to terminate their partnership, which has spanned nearly two decades.
“This agreement represents a step change for the aviation industry,” said Qantas chief executive Alan Joyce.
“It is far bigger than a code share. Or even a joint services agreement. This is the biggest arrangement Qantas has ever entered into with another airline.
“There will be considerable benefits for the broader [Australian] economy as we collaborate with industry to drive more inbound trade and tourism.”
Under the deal, Qantas will fly daily services from both Sydney and Melbourne to London via Dubai. Between the two airlines there will be 98 weekly services between Australia and Dubai. The carriers will also co-ordinate their services between Australia and New Zealand and between Australia and south-east Asia.
For Emirates customers, it will open up Qantas’ Australian domestic network of more than 50 destinations and nearly 5 000 flights a week.
“This is a momentous day in international aviation and exciting to be part of,” said Emirates chief executive Tim Clark. “The time was right to develop a long-term partnership with Qantas, the iconic Australian airline.”
The arrangement, which requires approval from Australian regulators, is expected to start in April, and is seen as pivotal to the future of Qantas.
The Australian carrier makes good money on its domestic routes but has been dragged down by loss-making international operations. Last month, it announced a net loss of A$244 million (R2 billion).