Qantas & Emirates Alliance
The Future of Qantas
The grass is not always greener on the other side… or maybe it is, Qantas divorces British Airways after 15 years in favour of a new romance with the Emirates. Dubai is to become the goto place for European flights with Qantas – Singapore loses out. This new alliance is a marriage of two massive airlines, not your basic code-share, revenue-share arrangement either.
Alan Joyce, the CEO of Qantas, recently announced that the airline will end its long-standing alliance with British Airways in March 2013 and forge a new alliance with Emirates. This new alliance will see Qantas replace Singapore as the current stop over destination with Dubai. All pricing and flight sales will be co-ordinated along with Emirates, which is intended to see a reduction in overall costs for passengers.
What is the Qantas and Emirates Alliance
The Qantas & Emirates Alliance is said to be the worlds leading airline partnership – with the tagline “Together we are connecting the Globe”
Imagine the two best players on the same side in any sport and you will have a formidable team, in aviation it is the same. Qantas and Emirates two of the most prestigious airlines in the world are joining forces creating a global partnership.
These iconic airlines will partner together in 2013 to create a network spanning four continents encompassing over 70 cities between Australia, Africa the Middle East and Europe. Not only is the destination list huge, they will boast the largest network of A380 aircraft offering the award-winning service with the undisputed in-flight entertainment system and multiple dedicated airport lounges.
Who is Qantas?
Qantas grew into what is known today as one of the world’s best airlines. Back in 1920 Qantas was founded in the harsh outback of Australia famous for its red sand and aboriginal art. It started out as the Queensland and Northern Territory Aerial Services Limited (QANTAS) flying biplanes with one or two passengers, and has grown into huge Airbus A380 jets that carry 450 passengers across the world in less than a day, dominating domestic and international flights for many years.
The name Qantas has a reputation amongst the aviation world of the highest order for engineering, safety, maintenance, reliability and not forgetting customer service. The airline is one of the strongest brand names in Australia employing some 35,700 people of which over 92 per cent are Australian based. Qantas is regarded as the world’s leading long haul airline.
Qantas and Jetstar, its younger airline between them transport customers domestically and internationally. Qantas also operate Q catering, Freight Enterprises and other airlines along with various other business, including the Qantas Frequent Flyer program.
Qantas has evolved from humble beginnings thanks to very determined people who battled the obstacles that stood in their way to establish what is Qantas today. The Australian staff and its loyal passengers have kept the flying kangaroo in the air through thick and thin and Qantas is more about the people behind, the business partners and suppliers it than the metal fuselage that fly across the skies today.
The future for Qantas is exciting yet not without its challenges. Maintaining world class standards, upholding safe operations and adapting to the demands of the passengers are important whilst staying competitive in the market for the long term is paramount for the airline.
Who is Emirates?
One of the youngest and fastest growing airlines in the sky achieving massive success with over 400 awards worldwide for excellence. Emirates first flew out of Dubai in October 1985 with only two aircraft of which only one was theirs. Since then they have grown into what is a global travel magnate renowned for its high standards and quality in every aspect of tourism.
Emirates have always strived for quality over quantity and with this in mind have developed many divisions to the Emirates business which are all based on this principle, they include Emirates Holidays, Tours, Adventures, Spa’s, Emirates Cargo, Skywards, Aviation College, Engineering and the Official Emirates Store.
The Dubai Government solely own the Emirates airline and have grown the business through competition in the open skies policy that Dubai has and not by using its governmental power to protect the company. The Government of Dubai has seen its investment grow since its third year and it has returned an annual profit each year since. The secret to the success of Emirates is providing outstanding service in the industry on a regular basis.
Today the fleet comprises of 180 aircraft flying to over 70 countries in six continents with more than 120 destinations and still growing. Each week more than 1200 Emirates flights leave Dubai International Airport, this equates to around 40 per cent of the total air traffic. This can only keep growing as Emirates are constantly looking to expand their already modern fleet.
They have orders for many more aircraft, ranging from the A380, 777-300ERs and 777-300ER series. Emirates have billions tied up in orders of more than 230 planes and is currently the largest operator of the Airbus A380 and Boeing 777. This is incredible to think that Emirates is one of the youngest airlines yet the largest in the world. Dubai is set to become a global world wide long haul hub. The year ending 2012 Emirates carried some 34 million customers to many destinations.
Who does this alliance affect?
Since 1995, Qantas has been allied with British Airways. This has allowed the airline access to European destinations that included London and Frankfurt, using Singapore as a stop-over point. However, as of March 2013, that alliance will come to an end.
The end of this alliance will mean Qantas flights will no longer fly into Frankfurt on a daily basis. It will also mean changing the regular stop over point into Europe from Singapore to Dubai. This action allows the airline to retire some of the older planes within the fleets, such as the aging Boeing 747-400s, which should improve profits over the short term.
While Qantas will remain a part of the Oneworld alliance of carriers, the airline will not retain a code-sharing agreement with the airlines Air France or Cathay Pacific.
As a result of terminating the alliance agreement, Qantas will also cease its revenue-sharing agreement with British Airways. This is set to affect Qantas’s overall financial bottom line.
What does this alliance mean for customers?
Customers are set to be the big winners in the impending alliance between the two airlines. Qantas intends to increase the number of daily flights from most major cities across Australia to Dubai using Qantas operated aircraft or coded A380 flights or coded Boeing 777 flights.
Daily flights to Auckland from Sydney and Melbourne are also slated for launch in October 2012 using the Airbus A380 services now available through Emirates. Qantas also intends to launch daily flights to London from both Sydney and Melbourne, also using A380 services via Dubai. Qantas will retain its current daily flight to Tokyo.
Using Dubai International Airport as an operating hub allows Qantas customers far easier access to an increased number of European destinations with a single stop-over point. It also allows for easier connection to four major continents and hundreds of other destinations.
Regional Qantas customers are also set to benefit, with increased flights from regional centres meaning fewer multi-stop flights to reach European destinations.
Business customers should see an increase in efficient travel across Europe, North Africa and the Middle East as a result of Qantas switching to Dubai as a hub.
While there are obvious benefits for customers travelling to European destinations, Qantas still reports a decline in passenger numbers on domestic flights. This is likely a result of price discounting among competitor domestic airlines, which Qantas is seeking to address.
Qantas and Emirates also intend to align their frequent flyer programs, which should allow customers to enjoy increased benefits and further opportunities to accrue points.
What does this mean for Qantas shareholders?
When the news of the impending Qantas-Emirates alliance was announced, shareholders seemed pleased. Macquarie Equities analyst Russell Shaw reported that an estimated increase in Qantas’s annual earnings as a result of the alliance with Emirates is likely to rise as high as $90 million.
Prices of Qantas shares increased by 6.5 cents, which is a rise of 5.8%. This price increase may also have been fuelled by recent news that Etihad raised its shareholdings in Virgin Australia up to 10%.
Emirates does not currently have plans to own shareholdings in Qantas, and vice versa. Rather, the two airlines intend to focus on providing exceptional customer service and building an integrated network. This is set to include a range of pricing that is coordinated between the two airlines, along with network collaboration for coordinated flight scheduling and sales.
Alan Joyce says the entire alliance with Emirates is intended as a platform for future company growth, and is designed to increase the overall profitability of Qantas International.
What are the business benefits?
The impending alliance with Emirates is beneficial to Qantas International in multiple ways. In 2012, Alan Joyce instigated a ‘four pillar’ plan to turn around Qantas’s business future. One of the announced pillars was focused on the use of beneficial partnerships to increase the airlines global reach in order to benefit customers further.
The intention of using Dubai as a hub is to provide an easy gateway into Europe, North Africa and the Middle East. Additionally, Dubai becomes a convenient gateway point for flights into North America, South America and South Africa. Dubai is also a convenient stop over point for flights destined for Singapore and Hong Kong.
The alliance with Emirates should allow Qantas to strengthen business relationships with other large airlines, including American Airlines, China Eastern, and South African Airways.
Each of these factors should play a pivotal role in the future growth and profitability of Qantas International overall.
What was the official announcement?
The official press release announced the agreement between Emirates President Tim Clark and Qantas CEO Alan Joyce to ally the two airlines in an effort to provide customers with world-class travel opportunities.
The partnership is designed to expand Qantas’s reach across more than 70 European, Middle Eastern and North African destinations, along with simultaneously increasing services across South East Asia.
This will be achieved by Qantas using Dubai as a hub, which also facilitates more advantageous flight routes into North America and South America.
Alan Joyce said that forming a strategic partnership with the largest airline in the world puts Qantas International in a position to expand the travel options available to customers enormously. Additionally, Joyce says he intends for the partnership to be a driver to increase inbound tourism and trade, which offers benefits for the Australian economy.
The intention is to align the frequent flyer programs from both Emirates and Qantas. This allows customers more opportunities to earn more points, along with giving eligible customers lounge access and priority check-in benefits in more terminals than before. Together, Qantas and Emirates have over 80 lounges in airports around the world.
Tim Clark said that Emirates also stands to benefit by the alliance with Qantas. Australia has been a highly popular destination for many of their business and leisure passengers since the airline’s inception in 1996.
What routes will Qantas by flying now?
Qantas intends to establish daily flights to Dubai International Airport out of Sydney, Brisbane, Adelaide, Melbourne and Perth. With Qantas using the Emirates Airlines home of Dubai as its new hub instead of Singapore, this allows passengers more convenient “one-stop” access to European destinations, including London. It also opens up travel into the Middle East for passengers.
Using the Emirates Airbus A380 aircraft, Qantas will launch daily flights to Auckland from Sydney and Melbourne as of October. Qantas will also be launching daily flights into London from Sydney and Melbourne, with one stop-over point in Dubai en route.
Additionally, Emirates flights within Australia will now show on the Qantas schedules, along with a QF flight number.
Even though Qantas won’t be using Singapore as a hub, the airline does intend to increase capacity to Singapore and Hong Kong. The intention is to re-schedule timetables in an effort to offer same-day connections for passengers travelling to South East Asia from Australia. Qantas has no plans to change its current daily flight to Tokyo.
What class planes will be flying with the Qantas Emirates Alliance?
Combined, the two allied airlines boast one of the most modern fleets of long-haul aircraft anywhere in the world. This includes two of the biggest A380 fleets on the planet, which affords passengers outstanding luxury and comfort during flights. Emirates currently operates its A380 fleet to cities that include London, Paris, Rome, and Moscow.
Qantas has a long-standing reputation of being the best domestic airline on the planet. Combined with Emirates’ fleet of Boeing 777 aircraft, this gives Qantas customers access to multiple cities across Europe, Africa and the Middle East.
As a result of the access to additional superior aircraft within the allied fleet, Qantas intends to retire many of the old Boeing 747-400 aircraft within its fleet. These older planes are known to use more fuel during flights compared to newer aircraft, so this should help to reduce Qantas’s operational costs somewhat.
When will this alliance come into effect?
The joint venture arrangement between Qantas and Emirates is due to commence in April 2013, but it still does require the ACCC to approve the partnership in order to finalize negotiations. As a result of this joint venture, Qantas intends to terminate its current alliance with British Airways. This will take effect in March 2013.
When was this alliance announced?
Qantas CEO Alan Joyce made the announcement on the 6th September, 2012 that Qantas has entered an alliance agreement with Emirates. Mr Joyce also said during the announcement that the new partnership was intended to benefit passengers with more ‘one-stop’ flights across Europe planned, along with integrating the frequent flyer programs from both airlines.
Why have Qantas and Emirates formed an alliance?
The alliance between the two airlines has seen some varied responses since the announcement was made. Qantas CEO Alan Joyce says that the partnership was intended to achieve international growth at the same time as offering passengers far more options for travelling within the European market.
The alliance is also intended to assist Qantas in turning around its ailing international fortunes. Qantas reported a loss of $450 million for its international arm during the last financial year.
Aligning with the largest airline in the world gives Qantas customers access to more flight routes and destinations. Using Dubai International Airport as its new hub instead of Singapore also makes it much easier to coordinate more ‘one-stop’ flights across Europe, the Middle East and Africa for passengers.
Yet, there are murmurs circulating within the industry that Emirates could actually be the big winner in this agreement. The planned integration of the frequent flyer programs for both airlines means that Emirates will have access to more than 8.6 million Qantas program members and their accumulated points.
Analysts have estimated the value of the Qantas frequent flyer program to be in the vicinity of $2 billion. This constitutes more than half of the airline’s total market value, making it one of Qantas’s most lucrative assets.
Will this have an impact on Frequent Flyers?
Frequent Flyer program members are actually set to benefit from the impending alliance. The intention is to integrate the programs from both airlines, so members will have access to the best loyalty program in the world. Members have vastly improved opportunities to accrue points.
Combining the programs from both airlines also offers members some greatly expanded options for redeeming any points accumulated.
Both airlines also intend to allow passengers access to the benefits available on the tier status options. This includes lounge access in an increased number of locations, priority check-in services and priority boarding access.
Will Qantas still fly to Asia?
Despite moving its hub away from Singapore and over to Dubai, Qantas does still intend to fly to Asia. Flights into Singapore and Hong Kong will be rescheduled so that they’re better matched to any connecting flights that may be departing to other destinations. This will allow Australians to enjoy more “same day” connecting flights to intended destinations. Qantas intends to keep its current daily flight into Tokyo consistent.
Qantas CEO Alan Joyce says that further changes will be made to services for the Asia-Pacific region, as this is foreseen to be a location with significant potential for future growth.
How will this benefit Australia?
Qantas has long been an iconic Australian company. The news that it reported losses of $450 million in the last financial year from its international arm signalled that it was time for the company to adopt a new strategy. The intention is to bring Qantas International back to a profitable status and change its fortunes.
The alliance between Emirates and Qantas is intended to offer a boost to the Australian economy. The intention is to encourage more inbound tourism and trade as a result of the new partnership between airlines. Additionally, partnering with Emirates also allows Qantas management to focus on building and strengthening existing aspects of Qantas Domestic and Jetstar.
Forming more than 50% of the total company value, the Qantas Frequent Flyer Program is also anticipated to see more growth opportunities arise. This will further enhance the sustainability of Qantas as a company.
Australian passengers are set to benefit by having more access to ‘one-stop’ flights en route to European destinations. By the same token, this creates an opportunity for more European tourists to visit Australia.
How will the Qantas Emirates alliance work?
Allying with the largest airline in the world has the potential to make Qantas a much stronger airline overall. The alliance offers a positive way for Qantas to expand the number of international connections available to passengers, along with offering more international destinations.
There are three large airline alliances operating around the world, encompassing 58 different airlines. These are Oneworld, Star Alliance and SkyTeam. Yet, despite being the biggest airline on the planet, Emirates doesn’t belong to any of these. Qantas intends to retain its agreement with oneworld even as it goes into its alliance with Emirates.
On top of this, Emirates has chosen to complement its new partnership agreement with Qantas by also partnering with Oneworld, American Airlines, South African Airways, LAN and China Eastern.
The partnership agreement gives Qantas access to the broad Emirates network that operates across Europe, the Middle East and North Africa. In return, Emirates gains access to the Qantas-dominated Australian domestic market.
Can I access Qantas and Emirates Alliance lounges?
Between them, Qantas and Emirates offer access to over 80 lounges in airports around the globe. Premium travellers will be given access to the lounges of both airlines. Frequent Flyer members who are eligible will also have the same access levels. This includes access for eligible passengers to the world’s most expansive and luxurious First Class and Business Class lounges, located in the Dubai International Airport.
The future of Qantas
While the short term brings about the termination of Qantas’s long-standing alliance with British Airways and sees the inception of the new alliance agreement with Emirates, there is more to come.
Alan Joyce says that the Asia-Pacific region is perfectly poised for future growth and expansion for the airline. There are plans to make changes to flight schedules and times in order to improve services across Asia. However, there will need to be further changes made in order for Qantas to remain competitive in these markets and still stay profitable.
Qantas and Emirates Alliance FAQ
Can I earn points on all Emirates and Qantas flights?
Yes. The integration of both airlines’ frequent flyer programs means that Qantas members will accrue points on Emirates flights. On the other hand, Emirates members will also accrue points for Qantas international flights. They’ll also benefit by earning more points for any domestic sectors that exist on an international connecting flight.
Can my points be redeemed for any of the award flights on both Emirates and Qantas flights?
Yes. Members of either airline’s programs are able to redeem points or miles on either airline’s rewards networks.
Can my Qantas Frequent Flyer points be used on any Emirates flights now?
No. The actual agreement between the two airlines isn’t due to commence until April 2013, subject to receiving approval from the ACCC.
If I fly on an Emirates service, will my current tier status be recognised?
Yes. The integration of programs for both airlines will mean each will recognise the statuses of the other, regardless of which airline you’re flying with.
Will Qantas still fly to Asia?
Even though Singapore will no longer act as the hub for Qantas, the airline will still fly to Asian destinations, including Singapore. Previously, schedules were timed to coincide with connecting flights from Singapore across to Europe. However, with the new alliance in place, schedules will be rearranged to more closely coincide with flights to Singapore and Hong Kong to allow for more convenient connections to other destinations across South East Asia.
Will Qantas still have flights to London?
Yes. Qantas plans to launch daily flights to London, departing from Sydney and Melbourne. These flights will feature a stopover in Dubai en route. Flights to London from Adelaide, Brisbane and Perth will also be included, with direct flights to Dubai and connecting flights to London also being launched.
What will the differences in baggage policies be like between Emirates and Qantas?
In an effort to build a seamless passenger experience, both airlines will work with the same baggage policy. This will be the same across all codeshare flights.
Will there be additional checked baggage allowances for frequent flyers?
Yes. Members will enjoy the same benefits with additional allowances that are in line with their current membership status and the cabin chosen when traveling.
How can I book a flight using Qantas to go from Australia to Dubai, and then book a flight on Emirates to go from Dubai to Europe?
Once the alliance agreement comes into effect, passengers will be able to book fares through either airline to their intended destination. It will be possible to use either the Qantas website or the Emirates website. Alternatively, flights can still be booked through your travel agent.
If I book a flight on the Qantas website how will I know which carrier I’ll be flying with?
You will receive a confirmation throughout the booking process alerting you as to which airline you’ll be flying with.
How does the alliance affect me if I’m flying internationally before April 2013?
Regardless of where your flight destination is, nothing will change.
If I am a Qantas customer flying internationally from April 2013 onwards, what does this mean for my travel?
If you are flying via any of Qantas’s codeshare destinations, you won’t be affected by the alliance. This includes flights headed into North America, South America, Tokyo, Bangkok, South Africa, New Zealand, Jakarta, China, Hawaii or the Philippines.
However, flights into and out of Singapore and Hong Kong may have flight times rescheduled to more closely coordinate with connecting flights to other destinations. All passengers will be advised of any changes to their itineraries in this event.
Flights destined for Europe will also be rescheduled to include a stopover in Dubai instead of Singapore. For passengers who prefer to stop in Singapore or Hong Kong, these alternatives will still apply.
I have a flight booked after April 2013 for travel to London – what happens to my booking?
Your flight will remain booked, although you will receive transit options that allow you to choose between stopping over in Singapore or Dubai. All passengers will be contacted to discuss these options.
What if I want to transit through Asia?
Qantas will still offer a variety of transit options and alternatives throughout the Asian regions.
I’m booked to fly to Singapore/Hong Kong in May and specifically wanted the A380 – how will I be impacted?
Qantas will still offer Airbus A380 services flying into Hong Kong on each day from Thursday through to Sunday, inclusive. Previous A380 flights that flew into Singapore will transit to Dubai, with connections to London (subject to ACCC approval for the alliance agreement). All passengers with flights booked to Singapore with A380 services will be notified to discuss alternative options.
As a Qantas First or Business customer will I have priority check-in in Dubai?
Yes. Emirates will offer access to their dedicated check-in counters at the Dubai International Airport for all Qantas First and Business customers. The same consideration will be offered to Platinum One, Platinum and Gold Frequent Flyer members as well.
If I choose to fly with Emirates from Australia to Dubai, can I still use the Qantas lounge at my departing airport in Australia?
Yes, you can. As long as your membership status or cabin class allows for access, you will have access to the lounges for both airlines.
As a Qantas Club member will I have access to Emirates lounges worldwide?
Qantas Club members will find that their lounge access will be exactly the same when they fly with Qantas. When they fly with Emirates, they will also have access to the Emirates lounge in the Dubai International Airport.
As a Qantas Frequent Flyer will I still be able to use the Australian domestic lounges if I am connecting from an Emirates international flight?
Yes, you will. Regardless of whether your trip contains flights with both airlines, you will still retain the same lounge access.
If I am a member of the Emirates Skyward program and I’m travelling on the Qantas domestic network, can I use the Qantas domestic lounges?
Emirates Skyward Gold members are welcome to make use of the Qantas Club domestic lounges while travelling in Australia.