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Emirates: Qantas deal could come in 6 months

written by australianaviation.com.au | August 2, 2012

A deal between Qantas and Emirates could come within six months but will not include a revenue-sharing component, the chairman of Emirates has said.

A codesharing agreement between Qantas and Emirates could be finalised within six months but will not include any deal to share revenues, the chairman of Dubai-based Emirates has said.

“We’ve been engaging with them for some time,” Emirates chairman Sheikh Ahmed bin Saeed al-Maktoum told reporters in Dubai yesterday, according to Reuters. “The objective is to eventually see Qantas fly through Dubai.”

Speculation over the tie-up has increased in recent weeks after reports that the two airlines were in the late stages of talks that would see Qantas fly to Dubai for the first time. Qantas has issued a vague confirmation saying that Emirates is among a “number of airlines” with which it is discussing possible alliances.

The talks come as Qantas looks for ways to stop the bleeding from its international business, which lost an estimated $450 million in the last fiscal year due to rising fuel prices and slumping market share. A tie-up with Emirates, which operates the world’s largest international network, would allow Qantas to offer one-stop tickets to some 30 destinations in Europe and 18 in Africa, far more than it currently offers through Singapore and Hong Kong. In turn, Emirates would get access to Qantas’s domestic network.

On the surface, the deal would mirror the code-sharing agreement between Virgin Australia and Abu Dhabi based Etihad. But it would represent a significant change and in many ways a retreat for Qantas, which could be forced to scale back or give up its codesharing agreement with British Airways.


Meanwhile, the Transport Workers Union (TWU) has called on Australia’s corporate watchdog to investigate whether Qantas has broken any laws by leaking media reports on the Emirates deal and an earlier push to set-up an Asia-based premium carrier. The TWU, locked in a long-running battle with Qantas, claims the reports were leaked to distract the market from poor financial results. The union also argues that Qantas waited too long to inform the market of a 90 per cent profit downgrade in June.

Qantas dismissed the claims as a “conspiracy theory.” The Australian Financial Review, which broke the most recent round of reports on the Emirates tie-up, said the story was not leaked by Qantas.

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Comments (10)

  • David


    Tony Sheldon once again trying to bring down the flying kangaroo . The poor fella must have been dropped on his head as a child . He has demonstrated such contempt for the business that his workforce work for . They should work for the company not the tosser representing them .

  • Jo


    I don’t like Qantas, but that Tony Sheldon…. Idiot

  • Hutch


    Emirates deal is a good thing for QANTAS, however a deal with Qatar is better for them in my opinion.

    Qatar and Qantas will compliment each other better, Qatar doesn’t compete into QF’s main Sydney hub and whilst Qatar’s network is not as extensive as EK’s, it would still provide Qantas with a much larger one-stop European, African and Middle-east network. Not to mention that Qatar is a true 5 star airline and it appears is getting closer to IAG and potentially Oneworld.

    One thing I’m not sure of is whether QF can maintain a strong presence in Singapore without Frankfurt and London flights. Time for QF to patch up relationship with Cathay (European/North Asian codeshares) and work closer with MAS (India, SE-asian codeshares)

  • Andy


    Good point Hutch,
    Also to note would be the higher traffic feed qantas could gain from emirates’ 70+ wide body services a week into Australia whereas Qatar’s is only a fraction of this. Also to note is that Emirates will increase capacity into Australia with or without Qantas so by joining with them they can potentially make good of a bad situation whereas Qatar seems a little less ambitious. Just putting it out there, would it be possible to code share with both airlines?

    I think Qantas can still have a strong presence in Singapore and I think management believe this as well after investing $10million in new lounges over the past year whether that be with or without links to Europe. Jetstar is based there and helps provide a feeder for Qantas passengers onto asian destinations the same way it will do with Jetstar Hong Kong.
    With that in mind the Cathay Pacific relationship is pretty much over and i believe Qantas made the right decision on this one to forge a tie up with China Eastern over a limited agreement with Cathay.
    In terms of MAS I can see in the short term a code-share arangement and potentially a Qantas sydney to KL flight however whether qantas enters into a JV will remain to be seen over the longer term

  • Hutch


    Hi Andy,
    Agree with your points regarding Emirates 70 odd flights to Australia as opposed to Qatar’s 14. But since Emirates will soon be flying into the 5 major capitals, and already fly trans-tasman, will there be that much feeder traffic? As Qatar only fly into Perth & Melbourne, QF could code-share on those services with QF launching SYD-DOHA and BNE-DOHA flights with Qatar could codeshare on.

    I agree Qantas will maintain a presence in Singapore, but part of me feels they committed to the upgraded lounges before they predicted Europe flights via the middle east was an credible option (Not saying they wouldn’ have done it anyway). I just don’t see double daily A380’s to Singapore continuing (plus with QF5/6 most likely soon retired). It’s likely that Singapore will be served by more A330’s and sadly QF’s A330 product is not competitive with SQ’s and is a step down from its A380 product. QF needs to streamline its international product – A380, 747, A330 should all offer similar experience. With the smaller planes their passenger numbers in SIN and therefore their presence will drop.

    Agreed that the China Eastern – JQ HK idea is a good one. It is disappointing that QF/CX relationship is that bad as CX is a quality airline and I certainly wouldn’t mind flying a QFA380 to HKG to connect with a CX European flight. It’d certainly be better than connecting with BA. It would also allow flights to Europe via Mid East and return via Asia – and vice versa.

    Joyce’s strategy has been a ‘gateway’ model, which is probably the right way to go. I’d be looking at a solid SE-Asian hub, HKG and a middle eastern hub. I think flying into KL would make sense as it would allow good SE-Asian & West Asian connections through MAS. QF could then codeshare with MAS other Australian flights. Everyone likes Changi (including me – I’ll be on QF1 in a few weeks), but I see its ‘hub’ benefits dropping off without onward QF flights – Mumbai was dropped, Frankfurt soon will go. But just my opinion.

    I also saw on QF’s facebook page a comment that they were reducing Shanghai flights, which their own staff aoplogised for. But I can’t find confirmation of this on their website… so hopefully a just error as QF should be growing in Asia-Pacific.

    I’d also like QF to look at direct Brazil flights (if planes will make it?) if TAM joins oneworld next year… I think Brazil has some good growth prospects in the coming years with the world cup, olympics and their economy and this would be a monopoly route.

  • PaulE


    I agree with most of what is being discussed here. Qatar would be abetted match than Emerates because of the famous quality of service and that Emerates code-share would be like the minnow and the whale. We all know who would win that partnership. This might be an opportunity for QF to off-load some of the A380s that they no longer want. A swap with Qatar’s upcoming purchase of A350-1000s and Qantas’ A380s may be a solution to the declining patronage at Qantas and the growing patronage at Qatar. Also, as much as I love London, any reason to not transit through LHR to get to Europe would be a good prospect. The taxes are a killer and the idea of adding 4 or 5 hours to a journey because of the necessary back-tracking makes SQ quite attractive.

  • Jason


    Qantas needs to maintain consistency of their service before even considering additional code-share partnerships. The key thing business travels (especially those in the premium cabins) seek is ontime performance and consistently good (if not high) customer service. I’ve found Qantas to be sensational on some occassions but mediocre at best on others. Ontime performanc is the mainstay of a good airline and is as much a function of fleet utilisation (at sensisble levels, with time for minor repairs between sectors), fleet age and crew engagement as anything else. Without ontime performance, alliance/codeshare partners will stay away as delays translate to downstream headaches and costs to connecting airline flights.

    Singapore makes sense as a major hub for Qantas and indeed they seem to be investing in premium lounge upgrades etc. What’s needed is for Qantas to work out a way to successfully engage in Asian business politics to secure slots, airport access and build alliance partnerships that work for the foreign governments they’re serving. They also need to recognise that Governments like Singapore will balance the needs of their own investments (Temasak in SIA carriers SQ/MI/Scoot/Tiger) with the need to attract foreign investment. “Asian Face” is something that Alan Joyce seems to have a complete lack of understanding around.

    Personally Emirates looks like an interesting partnership, its with a non OneWorld carrier. There are potential ramifications given the rise and rise of Emirates so I can’t imagine OneWorld will be happy. At the rate Qantas is going, they might be the one leaving the OneWorld Alliance. Joining Star Alliance would have been a good move a few years back, but now that SQ and Virgin are codesharing more I feel it’s just a matter of time before Borgetti joins the Star Alliance club. That leaves Qantas to stay with One World, join SkyTeam (Delta, Royal Brunei – horrible option) or go solo.

    In my opinion, time Qantas work out to how build a tight alliance with Cathay – gives them a great Asian connection partner via Hong Kong and potentially build out a Qantas-based hub in Singapore with RedQ-vNext. Lets hope Mr Joyce shows some grace moving forward.

    …oh and while you’re at it – start engaging your people as well as you are trying to engage your customers – it starts and ends with the quality of your ground crew, cabin crew etc. Passengers are voting with their e-tickets and Qantas is losing.

  • raafpsa


    It’s the TWU, with thier narrow mind that seems to cause most of the industrial problems!! May it’s time they went where the BLF has gone!!

  • Peter


    What? dont like hearing the truth fellas. The 23rd of August will be interesting.

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