x Abu Dhabi, UAEWednesday 17 January 2018

Emirates Airline-Qantas 'game-changing' deal wins final approval

Arlines embark on a 10-year route-sharing deal in the highly competitive market between Australia and Europe, with Qantas moving its hub for European flights to Dubai.

Australia's competition regulator granted conditional final approval to a five-year alliance between Emirates and Qantas. Reuters / Daniel Munoz
Australia's competition regulator granted conditional final approval to a five-year alliance between Emirates and Qantas. Reuters / Daniel Munoz

A "game-changing" partnership between Emirates Airline and Qantas was approved by the Australian government yesterday.

It will result in both airlines embarking on a 10-year route-sharing deal in the highly competitive market between Australia and Europe. Qantas will move the hub for its European flights to Dubai under the partnership.

The decision follows a six-month review process by the Australian Competition and Consumer Commission (ACCC) to approve the partnership for an initial period of five years.

The review involved several rounds of public submissions and a comprehensive analysis of the benefits the partnership will deliver to customers.

"This is a truly game-changing partnership that brings together two of the world's best airlines and offers some of the highest quality travel experiences," said Tim Clark, the president of Emirates Airline.

"Dubai is a leading global hub and through it, our two airlines will connect Australia to Europe, the UK and northern Africa more smoothly than ever before."

Qantas and Emirates applied to the ACCC for authorisation of their partnership last September. In December the ACCC announced its intention to approve the partnership for the first five years of the contract, and last month, the ACCC approved an application for interim approval. This enabled the two airlines to coordinate pricing, schedules and capacity in advance of yesterday's decision.

Fares on the joint network went on sale in mid-January for travel from Sunday.

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 flying to Terminal 3 at Dubai International Airport, the hub's new purpose-built A380 concourse.

"Qantas is an Australian icon and the future of its international business is much brighter with this partnership," said Alan Joyce, the chief executive of Qantas Group.

"Customers are already responding very strongly to the joint network that Qantas and Emirates have built, and to the frequent flyer benefits that extend across it, with a significant increase in bookings."

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's Australian domestic network of more than 32 destinations including Canberra, Port Lincoln, Cairns and Hobart.

Qantas and Emirates will maintain current levels of capacity on the four routes that both airlines fly between Australia and New Zealand. Subject to approval in New Zealand, the ability to cooperate on these trans-Tasman routes creates the potential for the two airlines to market both Australia and New Zealand to their global networks.

Qantas's new operational hub in Dubai is ready. The first flight is scheduled from Sydney to London via Dubai on Sunday.

Under the agreement, Qantas is to close its Singapore hub for European flights from next month and end its existing 17-year revenue-sharing agreement with British Airways on the services between Australia and Britain.

The arrangement has enabled Qantas to cut loss-making international routes and focus on its profitable domestic and budget operations while improving Emirates's access into the lucrative Australasian market.

In September, Mr Clark of Emirates said: "The time was right for developing a long-term, future-forward partnership with Qantas. Australia is one of the top three destinations in our network."

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.

dblack@thenational.ae