As I have written a few times over the last few months [see the links below] it is clear that Emirates and Qantas are getting closer and closer by the day, with this week likely to see an announcement by the carriers, which will be the biggest ever change in Australian aviation.
This change will effectively see the end of Qantas’ traditional kangaroo route operations, the final cementing of a new kangaroo route via the Middle East and the potential of Jetstar beginning to operate long haul kangaroo route flights to Europe.
With Qantas wallowing in debt brought about largely by the collapse of its international business, which has been craftily split off from its domestic and low cost businesses, the rumour mill is buzzing that Qantas is about to sign a deal with the highly profitable Emirates as early as this week, with the deal including a range of route swaps and code share agreements.
Industry analysts say that the code-share agreement is believed to include a range of what appear to be called route swaps, that mean Emirates would fly all, if not the majority of the flights on a number of routes, including for example Perth to Europe, which would now be via Dubai, with connections provided on via Dubai.
It is also appears possible that all Qantas flights to Europe will now terminate in Dubai, with passengers flying on with Emirates to its many European destinations.
What a turnaround for Alan Joyce, who has continuously criticised Emirates for competing unfairly, being subsidised by their government and for taking advantage of lower labour costs and while it is not known if Joyce has visited Dubai to take part in the discussions and negotiations, what a humble pie and cap in hand exercise that would have been for Qantas and Alan Joyce.
So what does this all mean to Qantas and its passengers?
I reckon this effectively means the end of Qantas international operations, which will ultimately shrink to a couple of long haul routes including S Africa, possibly the Pacific although that is under threat as it is also currently highly unprofitable with strong competition driving down prices and of course revenue, and finally a few relatively short haul routes, including a few into S Asia to connect with Emirates flights and New Zealand….and that is it!
As a result, we will see dramatically fewer Qantas aircraft flying overseas, with Qantas’ declining need for aircraft demonstrated by last weeks cancelled orders for 35 Boeing Dreamliners.
With Joyce having begun an investor roadshow overseas, questions will be asked about this arrangement with Emirates and the future of Qantas and I reckon whether Emirates will buy a stake in Qantas domestic.
I also still believe that we will see Qantas A380’s flying in Jetstar livery, on what was Qantas’ former traditional kangaroo route via Asia to the UK with maximum economy seat capacity – it makes simple commercial sense – and while denied by Joyce, who said several years ago that there would be no further “Jetstarisation” of Qantas, he was soon proved to be wrong!
I reckon we should all watch this space, with this week’s announcements heralding the beginning of the end for QF international.
An Industry Insider Report by John Alwyn-Jones, Global travel Media Special Correspondent.