The struggling Australian airline Qantas has signed a deal with Emirates Airline to move the hub for its European flights to Dubai.
It will also embark on a 10-year route sharing deal in the highly competitive market between Australia and Europe.
But according to reports from inside the negotiations, Qantas has not got all it sought from the deal, with Emirates resisting closer ties.
Under the agreement, signed yesterday in Sydney, Qantas will close its Singapore hub for European flights from March and end its existing 17-year revenue-sharing agreement with British Airways on the services between Australia and Britain.
The arrangement will enable Qantas to cut loss-making international routes and focus on its profitable domestic and budget operations while improving Emirates’ access into the lucrative Australasian market.
However, the deal stops short of a global revenue-sharing or either partner holding shares in the other, which is understood to be what Qantas sought, according to reports in the Australian media.
Neither airline was available for comment.
Qantas will fly daily Airbus A380 services from both Sydney and Melbourne to London via Dubai, meaning between the two airlines there will be 98 weekly services between Australia and the Emirates hub.
It will also result in Qantas becoming the only other airline operating to Terminal 3 at Dubai International Airport and the hub’s new purpose-built A380 concourse.
Emirates will also seek to use the alliance to increase the number of its passengers using the airline’s stopover deals, providing a further boost to the UAE’s tourism industry. For Emirates passengers, the alliance will also open up Qantas’ Australian domestic network of more than 50 destinations and nearly 5,000 flights per week.
The arrangement, which requires approval from the Australian competition and consumer commission, is expected to start next April.
“The time was right for developing a long-term, future forward partnership with Qantas,” said Tim Clark, the chief executive and president of Emirates. “Australia is one of the top three destinations in our network. By establishing this partnership we are providing our passengers with additional connectivity in Australia and the region and the ability to utilise enhanced frequent-flyer benefits and have access to premium lounges for an exceptional travel experience.”
The deal follows Etihad Airways’ increasing its holding of the Australian rival airline Virgin Australia to 10 per cent, intensifying competition on the so-called “kangaroo routes” between Europe and Australia.
“This agreement represents a stepchange for the aviation industry,” said the Qantas chief executive Alan Joyce. “It is far bigger than a codeshare 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 economy as we … drive more inbound trade and tourism,” he added.
Qantas said it would not leave the oneworld alliance of carriers but would end its codesharing agreements with Cathay Pacific and Air France.
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