Emirates Airline alliance with Qantas gets final approval

March 27, 2013 12:38 pm

The approval granted by the Australian Competition and Consumer Commission allows the airlines to combine operations, but only for an initial period of five years, not the 10 years the airlines had been seeking.

The ACCC also said that its approval was conditional on the airlines not reducing flights between Australia and New Zealand.

ACCC chairman Rod Sims said the alliance will ‘result in material, but not substantial, public benefits’ for customers.

“In particular, the alliance is likely to provide Qantas and Emirates customers with increased access to a large number of existing frequencies and destinations under a single airline code, improved connectivity and scheduling, and access to each alliance partner’s frequent flyer programs,” he said.

The ACCC had given draft approval of the tie up in December, a few months after the carriers said they had agreed to an alliance. Under the tie up Qantas’ is moving its hub to Dubai from Singapore for European-bound flights. The airlines will also codeshare most flights and link their frequent flyer programmes.

From Dubai passengers will be able to connect with direct Emirates flights servicing 65 destinations in Europe, North Africa and the Middle East. The two carriers will offer a combined total of 98 flights a week between Australia and Dubai, with Qantas continuing to operate daily services from Melbourne and Sydney through to London.

Aviation analyst Saj Ahmad said the deal is a life-saver the struggling Australian carrier. “For Qantas, this is a great move. Qantas has been battered by the efficiencies and world class products offered by its rival Arab airlines and is a loss making airline struggling to keep its head above water. Until this deal with Emirates came about, Qantas had zero presence in the Middle East – an almost suicidal stance given the swathe of growth in the GCC region. But tying up with Emirates not only allows them to make use of Emirates dedicate terminal hub in Dubai, it also allows them to better connect passenger via to and through Dubai,” he said.

Ahmad emphasised that the new alliance now paves the way for customers to use Dubai as a one-stop-hop between Europe and Australia. “Both airlines will be disappointed that the ACCC did not grant them the a ten year deal as they had hoped, but even with the approval of a five year pact, there is no reason why the ACCC would not extend this when the time is right,” he noted.

“What this deal does also shows is that Emirates is a fantastically successful airline that has frankly embarrassed Qantas into submission for this tie-up. For all the years that Qantas has lambasted Emirates with unfounded allegations about getting free or discounted fuel, none of which has ever been proven by Qantas, it just shows that Emirates is a big power broker that cannot be ignored. Qantas found that out the hard way and there is no escaping the fact that they are the weak party in this partnership,” he added.