PHOTO: Emirates CEO Tim Clark and Qantas CEO Alan Joyce when they first signed the partnership in 2012.
Qantas plans to extend its partnership with Middle Eastern carrier Emirates for an additional five years.
- Qantas expects benefits from its extended tie-up with Emirates of $80m a year
- Singapore to return as Qantas Europe stopover from March 2018
- "Qantas is now renegotiating from a position of greater strength" — aviation analyst Neil Hansford
However, it will need to once again seek authorisation from regulators, including the Australian Competition and Consumer Commission (ACCC), to continue coordinating pricing, schedules, sales and tourism, and code-sharing with Emirates.
The Australian airline expects the further five-year agreement will result in "net benefits of more than $80 million a year from 2019".
The Centre for Aviation's chairman Peter Harbison agrees that the continued alliance will be beneficial to Qantas.
"The best way is to join them.""It will save a lot of money, because it won't have to compete with Emirates," he said.
One notable change is that Qantas will drop Dubai as the stopover point for its Europe-bound flights.
Instead, it will revert to using Singapore as the transit point for its Sydney-London A380 services from March 25 next year.
In recent years, consumer surveys have shown that passengers express a strong preference for an Asian stopover — rather than the Middle East — on flights to Europe.
Five years ago, Qantas stopped sending its Australian flights to London and Europe via Singapore — around the time it entered its alliance with Emirates.
"Our partnership has evolved to a point where Qantas no longer needs to fly its own aircraft through Dubai," Qantas chief executive officer Alan Joyce said.
"That means we can redirect some of our A380 flying into Singapore and meet the strong demand we're seeing in Asia."
Qantas 'renegotiating from a position of strength'However, Strategic Aviation Solutions' chairman Neil Hansford was a little more cynical.
"If the alliance were to happen, the transit had to be via Dubai — but Qantas is now renegotiating from a position of greater strength," he said.
Last week, the company delivered its second-largest underlying profit on record, totalling $1.4 billion.
"For Qantas to maintain its market share on the Australia-London route, it needed to restore Singapore as a stopover destination," Mr Hansford said.
One clear winner in this deal is Singapore's Changi Airport, which will get a substantial boost to its air hub status."Otherwise, they would lose the passengers, who don't want to stop at Dubai, to other airlines."
In a separate statement, the Changi Airport Group praised the Qantas decision and said it would provide an additional 3,806 one-way seats, which is an increase of 5.5 per cent, every week (on Singapore-Australia routes).
Australia is among the Singapore airport's top five country markets in terms of passenger traffic — with more than 5.5 million passengers travelLonbeningapore and Australia every year.
To me this sounds like winding down of the partnership in response to the direct Perth to London. It's still a shame Qantas won't be flying to other European cities. Does the deal benefit Qantas much?