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Qantas divorces from British Airways to marry Emirates

Author: Luc Citrinot / Date: Thu, 09/06/2012 - 09:45

Australian air carrier Qantas seals a partnership with Emirates Airlines and ends its joint business venture with British Airways.

SYDNEY - Rumours about a possible partnership between Australian national carrier Qantas and the Dubai aviation giant Emirates Airlines were confirmed yesterday by Qantas CEO Alan Joyce.

During a press conference, he explained the reason behind this major shake-up for the world and Australian air industry: “This morning Tim Clark, Emirates CEO and I signed a Commercial Agreement to form the world’s leading airline partnership between Qantas and Emirates. We have agreed to join forces to give our customers the most comprehensive premium travel experience on the planet. We will be poised to deliver the best in networks, frequencies, lounges, loyalty programs and customer experience. There will be no equity investment on either side. This is a partnership of independent peers, based on shared standards and aspirations”, he stated.
Pending approval by the regulatory bodies, from April next year Qantas will transfer its hub for European flights from Singapore to Dubai. "Our daily Airbus A380 services to London from Melbourne and Sydney will transit via Dubai’s Terminal 3, the world’s only purpose-built A380 terminal. Qantas and Emirates will be the only airlines in the Terminal, so we’ll have a big Qantas presence and access to superb lounges and facilities for Qantas customers,” added Joyce.

“This agreement represents a step-change for the aviation industry. 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. A ten year partnership, which will be good for all parts of the Qantas Group. Subject to regulatory approval, it will include integrated network collaboration with coordinated pricing, sales and scheduling and a benefit-sharing model”.

According to Qantas CEO, the new partnership will commence with 14 daily Qantas-operated or coded Boeing 777 and A380 flights from Adelaide, Brisbane, Melbourne, Perth and Sydney to Dubai, with its 24 hour hub and connection to four continents, providing an access to some 33 European destinations, of which seven are served also with an Airbus A380 such as London, Paris and Rome. Qantas travellers will also have access to over 30 Middle East and North African destinations from Dubai. However, Qantas flights to Frankfurt will be terminated while nothing has been yet announced about QF flights to London.

“In our discussions Tim and I came up with a guiding principle for this partnership: Treat each other’s customers as your own. Our two airlines will, of course, retain their distinct style and identity, but we will match key customer benefits. Where there is a difference in customer service, we’ve agreed to make the higher benefit our standard. We’ll operate from common terminals in Sydney, Melbourne, Dubai and London”, said Joyce.

“A lot has been said about Qantas and aviation partnerships. I’ve always made it clear we would not form any new partnership until we found the partner that was absolutely right for us, our customers and our business. Emirates is one of the world’s best airlines with an all wide-body fleet, an amazing global network, and a wonderful reputation for quality. Its extensive international coverage perfectly complements the strong Qantas presence in North and South America, South Africa and Asia and our domestic, regional and trans-Tasman network”, he added.

“The partnership is about creating a sustainable future for Qantas International. Last year I announced a four pillar plan to turn around that business. One pillar was the use of partnerships to extend our reach. Through our partnership with Emirates, Dubai will become the Qantas gateway to Europe, the Middle East and North Africa. Dubai will complement Dallas, the gateway to North America; Santiago for South America; Johannesburg for Southern Africa; and Singapore/Hong Kong for Asia. Emirates will complement our relationships with American Airlines, LAN, South African Airways and China Eastern, as well as oneworld”, explained Qantas CEO.

“We will be working through all these and other changes with our people, as with all relevant stakeholders. However over the long term I see our partnership with Emirates as a platform for growth and it’s going to be fantastic for Qantas, Emirates, for Australian tourism and business and for the Australian travelling public”.

In a statement, Qantas also announced that “International Airlines Group’s wholly owned subsidiary British Airways and Qantas have agreed to terminate their joint business from 31 March 2013. This follows Qantas’ announcement that it is entering a new global partnership with Emirates”.

The joint business was established in 1995 to enable close commercial cooperation on Qantas and British Airways services between the Australia and the UK. The airlines will continue to work together as part of the oneworld alliance and through bilateral code shares.

Qantas chief executive Alan Joyce said: “Over the past 17 years the joint business with British Airways has been central to the Qantas network. However, global operating conditions have changed and partnership with Emirates is the right strategy for Qantas. I’d like to thank IAG CEO Willie Walsh and British Airways CEO Keith Williams for their support of the joint business and I look forward to a continued strong relationship in future.”

IAG chief executive Willie Walsh said: “We’re ending the joint business on amicable terms and support Qantas’ decision to work with Emirates. The world has changed since 1995 when the joint business started. This is a small part of our overall network and this move fits in with changes in our global strategy. Asia has become a key market focus for IAG and we’re talking to a number of airlines about alternative options for us.

“Qantas has made it clear that its international performance has been weak and the termination of the joint business won’t have any negative impact on IAG’s financial targets. The good relationship that we have with Qantas CEO Alan Joyce and his team will continue through our joint membership of oneworld”.

Qantas will contact any customers due to travel after 31 March 2013 whose bookings may be affected by changes to the joint business, to discuss alternative travel options.