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Qantas has told the Australian Competition and Consumer Commission (ACCC) that its proposed ten-year alliance with Emirates is a strategic imperative if it is to reverse the “terminal decline” of its international operations.
Painting a dire picture of the state of its international business as it seeks approval for the tie-up, Qantas said it would be forced to stop flying to Europe if the deal with Emirates is rejected.
“In the absence of the authorisation, it is likely in the medium to long term Qantas will retreat to a ‘virtual network’ rather than an operating network,” Qantas said in its submission to the ACCC. “Under such a scenario, Australians will lose the benefit of Qantas operating a strong locally based international network airline. This is not in the national interest.”
Qantas said its international operations face “structural cost disadvantages” against other carriers that left it increasingly incapable of competing with Middle Eastern and Asian airlines that benefit from more favourable tax regimes, lower labour costs and more advantageous geographic positions.
It remains to be seen how the ACCC will view the submission, which goes well beyond the typical codesharing alliance to include coordinated pricing, sales and scheduling as well as benefit sharing through reciprocal frequent flier programs. Qantas and Emirates have applied for interim approval for the deal in order to begin commercial planning.
The airlines say the deal would provide significant benefits for Australian consumers by providing an expanded global network and enhanced frequent flier benefits while forcing other carriers to offer more competitive fares and products.
Responding to concerns the tie-up might lead to a reduction in flights between Australia and New Zealand, the carriers said they were willing to offer a formal commitment not to reduce overall trans-Tasman capacity. Qantas said it was also considering introducing flights between Adelaide-Auckland and Perth-Auckland.
Pending approval, the Qantas-Emirates alliance is scheduled to launch in April.
Ron
says:Whinge, whinge, whinge, whinge, whinge. How about giving us a CEO who can inspire customers to want to fly on their product, who can inspire staff to give 110%, who can seek new markets instead of whinging that the old ones aren’t profitable anymore, who knows which planes are better than the ones that might be the biggest.
Glynn
says:Alan Joyce and his team will get what’s coming to them. Wait until our contract comes up again Alan Joyce. You haven’t won
Raymond
says:Until Joyce goes, the rot won’t stop.
Ron
says:Dickson was a whinger too. The company needs a complete cultural overhaul.
Phill
says:Qantas, You’re the reason we fly Emirates and Emirates, we fly you because of Qantas.
Nik
says:I remember when Virgin was trying to get approval for code sharing with Delta, Etihad and Singapore from the ACCC and Qantas did nothing but complain and say how it wasn’t going to far on them, blah blah blah. But now that the shoe is on the other foot Qantas is singing a different tune. I don’t see Virgin opposing the merger, they are just going abouts their business of running an airline.
DB
says:Ok, so QF cant make a fist of flying its own metal to Europe other than 14 flights per week with the balance handed over to EK. Let’s accept that for the start and look forward to a higher standard overall.
Then, what about something positive – triple daily flights to HKG and SIN, double daily to NRT, how about getting into Korea? What about India? Double daily flights to Shanghai plus a daily to Beijing? And then don’t drop the frequency to New Zealand due to the use of EK aircraft – more direct flights – get Adelaide and Perth online?
Time to take the bull by the horns, deploy the 787 into the QF fleet and take back some market share in our region. Grab some cheap A330 leases and fit them out to the A380 standard and set some new benchmarks.
Time to stop bending over and taking it, Time to start getting out there and taking what they can.
Cri
says:@Ron
” who can seek new markets instead of whinging that the old ones aren’t profitable anymore”
That’s what they do.
Seek for new markets (e.g. better connections Australia Asia) and put the unprofitable Australia Europe in cooperation with EK.
Brett
says:Bad management and union grubs. They are both are equally to blame for this.
Annette
says:I feel that the employees of Qantas are facing the chopping block just like the Ansett employees did. They don’t have a management that they either trust or have faith in….and I don’t blame them. In the long run they are people who have the same concerns for a life style and ability to pay their bills…just like anybody else. Alan Joyce seems oblivious to this and thinks he is running his own airline and can treat people like dirt and idiots. He is always blaming anybody or thing else…….It’s dem ho r doing us wrong. A bad tradesman always blames his tools and in this case I feel the saying is appropriate.