A couple of days ago Qantas announced their biggest airline partnership yet, whereby they’re entering a 10-year agreement with Emirates. This comes at the expense of their joint business with British Airways, which they’re terminating as of March 31, 2013.
The practical implications here are that Qantas currently has daily Airbus 380 service from from Melbourne and Sydney to London via Singapore (I flew this service last year), and will instead be routing those flights via Dubai. In the past most passengers took the Melbourne/Sydney to London flights all the way through and connected on British Airways from there, though I suspect with the new partnership a lot more passengers will be getting off in Dubai and taking a connection on Emirates straight to their final destination in Europe, the Middle East, and Africa.
This will come at the expense of Qantas’ Singapore hub, as they’ll now just be focused on operating flights directly between Australia and Asia, as opposed to having them for the purposes of connections. They’ll also be dropping their Singapore to Frankfurt service as of next year.
Lastly, Emirates’ and Qantas’ frequent flyer programs will be aligned and reciprocal benefits will be offered, though we don’t know to what degree yet.
I find this decision really interesting. For the past 10+ years we’ve seen the airlines largely dump partnerships in favor of alliances. That’s not to say there aren’t still partnerships (like what United has with Qatar, American has with Etihad, etc.), but usually only to fill gaps that the alliance can’t. Here we’re seeing an airline more or less dump their alliance partner in favor of another airline.
Given the size of this partnership it really makes me wonder what the implications are for alliances. Even after giving it some thought for a couple of days, I have no clue which way this could go. Long term could it mean Qantas will be leaving OneWorld, Emirates will be joining OneWorld, or Qantas/Emirates will eventually form a fourth alliance? Could this add pressure to Qatar/Etihad, causing them to join one of the major alliances, given that they don’t have partnerships as strong as the Qantas/Emirates one? I think it’s anyone’s guess how this plays out and whether this is good or bad for consumers. I think the one obvious conclusion is that both Qantas and Emirates are trying to drive up fares on their Australia routes, so they hope this will allow them to raise prices long term.
While it’s minor in the grand scheme of things, here’s one thing I’m excited about — Qantas will be operating at least twice daily Airbus 380 service between Dubai and London, so it should be easy to include them on a OneWorld award ticket. I suspect award space will be relatively easy on that flight given that most people flying Melbourne/Sydney to Dubai will likely be connecting on Emirates, largely leaving the tag flight open to passengers originating/terminating in Dubai. Given that the only other OneWorld airline to operate the route is British Airways, and they impose huge fuel surcharges on award redemptions, that’s a pretty great addition.