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Qantas ends SAA pact but denies it will cut London

February 24, 2014 Aviation, Headline News 2 Comments Email Email

egtmedia59Qantas has taken the rare step of issuing an official denial that it is about to reduce its services to London.

Speculation that the airline will cut London services has increased recently, with observers pointing out the economic advantages to Qantas of serving intermediate points and switching London-bound passengers to an allied carrier rather than flying on to London itself. Such speculation has been circulating for at least 20 years and was around when Qantas operated a Joint Services Agreement with British Airways though Asia.

Qantas spoke out last week on what it called “a series of unsubstantiated and unsourced rumours swirling around ahead of our half year results, ranging from estimates on job losses to route changes”.

The carrier continued with a flat denial: “On the specific rumour that Qantas is looking to reduce its services to London, this is inaccurate.”

Qantas is, however, terminating its longstanding code share agreement with South African Airways, which has been in place for about 14 years. It will end on 31 May 2014.

The QF/SA codeshare began in October 2000 after SAA made the strategic decision to stop operating between Johannesburg and Sydney with its own aircraft.  The pact has always been unusual in that Qantas is a member of oneworld while SAA belongs to the rival Star Alliance.

SAA code share flights on Qantas’ Sydney operation will be closed off for sale on 21 February 2014, reports from South Africa stated at the weekend.

SAA flies from Johannesburg to Perth and Qantas flies Sydney to Johannesburg. They are the only direct services between Australia and Africa. Alternatives head through intermediate points like Singapore or Dubai.

Rumours that Qantas would axe or slash its London services have circulated ahead of important announcements from Qantas due this Thursday when the airline reveals its half-year results.

Qantas stated: “The facts are that Qantas has flagged the need to make tough decisions as part of strengthening our business, which we will outline next Thursday. For our customers, this won’t change our focus on being one of the world’s best airlines.”

In December, Qantas flagged job cuts of at least 1000 over the next 12 months in the face of what it said were unprecedented pressures in both domestic and international markets. The airline has also announced plans to cut AUD 2 billion of costs from its business over the next three years.

A persistent rumour suggests that Qantas will axe the Dubai-London leg of its daily Melbourne-London Airbus A380 service. Analysts say Qantas could cut costs by moving passengers from that flight onto the London-bound leg of the QF1 service from Sydney – or simply shift them onto connecting Emirates flights to other destinations in the UK or Europe.

Qantas chief executive Alan Joyce has previously said “all options are on the table”. Australian Business Traveller is tipping that Qantas will announce a sale of up to 49% of its frequent flyer scheme, “which could yield between AUD 1.3 billion and AUD 1.6 billion.

Selling back to the airports the long-term leases on the dedicated Qantas terminals at Sydney, Brisbane, Melbourne and Perth airports is another option.

Written by Peter Needham

Currently there are "2 comments" on this Article:

  1. AgentGerko says:

    Those ‘analysts’ who suggest moving the MEL-LON pax at DXB on to QF1 miss one point. Why the hell would pax put up with it? Given a choice of a through service with EK or risking lost baggae and delays by transferring between QF flights people would just find another reason to give QF the flick. But then how many still go on to Heathrow anyway? My people transfer at DXB and fly straight in to Glasgow, or Birmingham, or Newcastle or Manchester and avoid Theifrow.

  2. Peter Needham says:

    Those are good points, AgentGerko, as usual from you. Your input is appreciated. Keep ’em coming!

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