Qantas Is Cutting Dubai Flights, Changing Up Partnership With Emirates

Five years ago Emirates and Qantas formed a joint venture, which has been wildly successful for both airlines. At the time Qantas flew from both Melbourne and Sydney to London via Singapore.

When the joint venture was formed, Qantas began operating their London flights via Dubai instead.

This was brilliant, as it allowed all kinds of new one-stop routings from Australia to destinations in Europe other than London, given Emirates’ extensive route network. For example, previously if you wanted to fly from Sydney to Prague on Qantas you’d have to fly from Sydney to Singapore to London to Prague. Under the joint venture, the same passenger could fly from Sydney to Dubai to Prague.

On top of that, Emirates has a huge fleet of A380s, while Qantas’ fleet is quite small, so their independent growth potential was limited. Qantas has had some of their best financial results in history the past few years, and their joint venture with Emirates is at least partly to thank for that.

So I was a bit surprised today to see that Qantas is cutting their flights to Dubai altogether. But there’s more to this change than meets the eye.

Qantas was already going to change their route network

We already knew before today’s announcement that Qantas is in the process of changing up their longhaul route network. Qantas is about to start taking delivery of their first of eight Boeing 787 aircraft, which will make some new routes possible. Next March Qantas plans on commencing nonstop flights between Perth and London, and at that point they plan on cutting their Melbourne to Dubai to London flight.

This makes sense, especially as it will allow them to refresh their A380s in 2019. At that point the only Qantas flight to Dubai would be their Sydney to London service. But today some more serious changes were announced.

Qantas is cutting Dubai service altogether

As of March 25, 2018, Qantas will no longer operate their Sydney to Dubai to London flight. They’ll instead replace it with a Sydney to Singapore to London flight, which is identical to what they offered prior to the Emirates and Qantas joint venture.

On top of that, Qantas will upgrade the Singapore to Melbourne flight from an A330 to an A380. In other words, passengers can fly from Sydney or Melbourne to London via Singapore on A380s the whole way.

On the surface it sounds like there’s trouble with the Emirates and Qantas joint venture, eh? Not so much, apparently.

Emirates and Qantas have renewed their joint venture for five more years

Qantas put out a press release about their joint venture with Emirates, which they plan to renew for five more years. So why is Qantas cutting flights to Dubai while the two airlines are claiming that the partnership is as strong as it has ever been?

I’ll let Qantas’ CEO, Alan Joyce, explain:

“The first five years of the Qantas-Emirates alliance has been a great success. Emirates has given Qantas customers an unbeatable network into Europe that is still growing. We want to keep leveraging this strength and offer additional travel options on Qantas, particularly through Asia.

“Our partnership has evolved to a point where Qantas no longer needs to fly its own aircraft through Dubai, and that means we can redirect some of our A380 flying into Singapore and meet the strong demand we’re seeing in Asia.

“Improvements in aircraft technology mean the Qantas network will eventually feature a handful of direct routes between Australia and Europe, but this will never overtake the sheer number of destinations served by Emirates and that’s why Dubai will remain an important hub for our customers.”

The way joint ventures are structured, airlines have a revenue sharing agreement where all airlines get some revenue, even if they’re not actually operting the route. The reality is that Emirates can offer almost unlimited capacity, so Qantas isn’t really adding all that much value by duplicating Emirates’ routes from Melbourne and Sydney to Dubai, and from Dubai to London.

Qantas’ small fleet would be much better utilized in other markets to give passengers more options. As you can see above, long term Qantas would look to offer a handful of direct flights from Australia to Europe, maybe a route or two via Asia, and then they’ll leave the rest to Emirates.

Qantas estimates that these changes will provide an annualized net benefit of 80 million AUD starting in 2019. Interestingly those direct flights to Europe, as well as the flight via Singapore, won’t be part of the joint venture with Emirates, so Emirates stands nothing to gain there. Instead their gains would likely come from their increased service between Australia and Dubai.

Bottom line

Ultimately we don’t know exactly how the joint venture between Emirates and Qantas is structured. However, the idea here makes sense. Emirates has a huge fleet while Qantas has a fairly small longhaul fleet. With Emirates more than capable of covering routes between Australia and Dubai, Qantas can focus on other routes that are potentially high yield, presumably while taking a cut on the Emirates flights.

It’s an interesting move that at first seemed counterintuitive, but I can see how it makes sense.

To those who have taken Qantas’ flight from Australia to Europe, do you prefer the Dubai or Singapore stopover?

(Tip of the hat to SINJim)

Comments

  1. There is no doubt that with joint venture pricing, many Australians were choosing to fly Emirates over Qantas, which has simply, a far superior product in J/F. Switching between QF/EK metal via DXB/LHR and codeshares was also extremely confusing, particularly for elite/oneworld benefits.

    If QF runs only QF metal through SIN to LHR, and EK runs only EK metal through DXB to LHR, it’s a much cleaner solution from a pax experience.

  2. The other thing is that this develops the SIN hub for Jetstar, which is Qantas-owned. Effectively, the A380 feed will have boost the Jetstar network and allow them to sell more aggressively into Asia. It’s a much smart shift in capacity and networks.

  3. A return to the old Kangaroo route to the Old Dart will be welcomed by traditionalists like myself. The fact it’s via a great terminal like Changi is the icing on the cake!

  4. At first sight this looks like a temporary measure until all QFs flights to Europe go via Perth, SYD-PER-LHR etc. But there are obstacles, Perth airport infrastructure is poor and the QF domestic terminal is about 5 miles away from the international departure shed, so it won’t be easy to mix domestic and international flights to Perth. As for the “joint venture” with EK, Qantas seems to have been relegated to being a sort of booking-agency for the superior Emirates flights to Europe.

  5. Lucky, some small corrections: Qantas cancelled 27 of their 35 787-9 orders, so now only 8 are on order. News that you have not mentioned here is that 4 of the 787-9s will be based in Melbourne for the MEL-LAX and MEL-PER-LHR flights. The other 4 will be based in Brisbane for yet-to-be-announced flights. Their long-haul fleet is not that small with 28 A330s, 10 747s and 12 A380s currently in service. As to which stopover people prefer, an article published about this on http://www.australianaviation.com.au says that, according to a recent survey, customers preferred the Singapore stopover.

  6. “With Emirates more than capable of covering routes between Australia and Dubai, Qantas can focus on other routes that are potentially high yield, presumably while taking a cut on the Emirates flights.”

    Why does EK need the joint venture at all? They’re not getting any money from QF’s additional Europe flights. Couldn’t they just expand their Australia service, offer good routings via DXB, and let QF do what it wants?

  7. Wrong! No cookie for you!

    “For example, previously if you wanted to fly from Sydney to Prague on Qantas you’d have to fly from Sydney to Dubai to London to Prague. Under the joint venture, the same passenger could fly from Sydney to Dubai to Prague.”

  8. This is fantastic news, not least for the stopover experience alone – Changi is hard to beat and MUCH nicer than Dubai Airport! Its regional connections are excellent, with Jetstar as keitherson says, but also with Singapore Airlines and subsidiaries. But if you want to stop for a few days to break the journey, Singapore is the perfect place for it.

    @wanderer_au QF flight attendants I chatted to on my flights over the past 1-2 years had been suggesting this might happen, and as a bit of a traditionalist myself, I’m very pleased that it finally is!

  9. Is there anybody who would prefer to transit or stopover in Dubai rather than Singapore? This is a much better way to Europe.

  10. I think QF A380 F is nicer than EK A380 F.

    I also much prefer the DXB stop/airport vs. Singapore. The F lounges in DXB are impossible to beat.

    Singapore Changi is overrated. I much prefer connecting in DXB, even leaving lounges aside.

  11. Sydney- Dubai is abit of a surprise.
    That MEL got the cut first was no surprise. And there’s more than meets the eye in this measure despite EK & QF extending their JV.

    The Mel-DXB-LHR was performing very poorly. The flight would leave Dubai almost empty at times. It was this time that EK changed flight times so that flights from Syd and Mel would arrive almost at the same time in Dxb so the onward flight to London would get better yields. At the same time when that flight was struggling EK added a 6th daily A380 to LHR which angered QF.

    There should be enough O&D demand to sustain a flight to LHR via Sin. The rest of Europe will probably continue to be served via Dubai. And keep in mind that QF and the Lufthansa group now have a JV to Australia via Singapore.

  12. There were most changes at that time. SIN was a mini-hub for Qantas. For example they had also flights on a 747 from FRA to SIN. At the same time you had e.g. Singapore to Brisbane. So you could fly FRA-SIN-BNE all on Qantas metal. Interesting to see if there plans go that far to re-introduce such options as well.

  13. @Harry Hv – Qantas International flights from Perth will be moving to the Qantas Domestic Terminal where Qantas is building an international wing – including a new lounge.

  14. This is not surprising if one has any level of understanding of what’s actually happening at QF/that part of the world. The assessment of QF’s recent return to record financial performance is misinformed or lacks proper research. A quick look at announcements a few days ago would’ve shown that QF International is a rubbish part of the QF business that saw further underperformance this year (EBIT down close to 40%) and was not the reason for the strong results. Profit growth has been driven by the end of its domestic war of attrition with VA that almost bankrupt both airlines a couple of years ago, and the loyalty program that is effectively printing its own money. The Australian market is back to a duopoly (think QF-Ansett days) and the profits seen during those heady days are being observed again. Almost nothing to do with Emirates. Emirates has been the bigger winner in the relationship in reinforcing an additional spoke to its hub strategy. QF was handing passengers to Emirates and locking themselves out of a proper international competing strategy as there was no way QF could challenge Emirates on follow on routes. Flipping back to SIN now allows QF to redevelop/strengthen a key feeder to Jetstar Asia and its Asian strategy. Not surprising at all.

  15. “Why does EK need the joint venture at all? They’re not getting any money from QF’s additional Europe flights. Couldn’t they just expand their Australia service, offer good routings via DXB, and let QF do what it wants?”

    With the JV they can still attract Qantas frequent fliers on the other routes to/from Europe. If they can’t do that there’s another OneWorld horse in town (Qatar) that those FFs could defect to.

  16. I prefer Qantas Perth-London direct flight, Sydney-London in 2022. @Lucky, Ben, not everyone is crazy on Dubai like yourself, If I have to choose a stopover, Singapore is always ahead of Dubai.

  17. Also worth saying that Etihad has added lots of capacity to Australia via the Middle East, including 2 flights per day to Melbourne and Sydney, the latter of which will soon both be operated by A380s.

  18. To answer your question – there is only one answer. Singapore is far preferable to Dubai. Singapore is vibrant and acts as a gateway to Asia. It has one of the world’s best airports. An incredibly vibrant food and bar scene. I culturally diverse, and has a much better climate than Dubai. Since I invariably gateway into Europe from London – this is perfect.

    http://2paxfly.com/2017/08/31/qantas-a380-returns-to-singapore-abandons-dubai-australians-experience-religious-ecstacy/

  19. Singapore wins hands down. Stopovers, nicer city. They lost a lot of premium long haul long term customers by going via Dubai. Perth anywhere in Europe is possible, Brisbane anywhere in North America is possible with the 787/9. Qantas subsidiary Jetstar is an early adopter of the 787 and I believe the Qantas Order for it’s 787/9/10 is not cancelled but deferred delivery dates. As such could add new non stop routes much quicker than anticipated. What Qantas offeres EK and all Qantas cares about is it’s domestic network as such it will hurt it’s domestic competitor VA more by going back to Singapore. VA pitch to premium was via Singapore on Singapre for it’s domestic premium clients.

  20. I went to Melbourne in 2009, when Qantas operated LHR-MEL via Hong Kong in a 747. I would like to see Qantas flying MEL-HKG-CDG, it could be profitable and they could have a partnership with Cathay

  21. I’d prefer Hong Kong, Tokyo or Seoul to Singapore or Dubai. They balance the flight legs more evenly and make jet lag easier to deal with between Australia and Europe.

  22. Qantas is more so than not, playing this smart, the amount of Australians/Asians rolling in and out of Australia/Asia daily and mainly via Singapore is phenominal, Asia is just a hop, skip and jump from Australia and is our most popular tourist destinations. Indonesia, Thailand etc. with low cost carriers like Air Asia, Tiger, and the other up and coming LCC, I guess Qantas owning Jetstar which is based out of Singapore , to run aircraft like an A380 to Singapore is a logical decision, I and many other Australians love transitting through Singapore. With the likes of Singapore airlines, Scoot etc. there is a huge market share up for grabs. What Qantas and Emirates have via Dubai is already market sown up. I think this a clever move, I believe it has more so to do with Asia than it does Europe, because I and many other Aussies probably got to Asia several more times for every 1 trip to Europe.

  23. “For example, previously if you wanted to fly from Sydney to Prague on Qantas you’d have to fly from Sydney to Dubai to London to Prague. Under the joint venture, the same passenger could fly from Sydney to Dubai to Prague.”

    You mean from Sydney to Singapore to London to Prague

  24. you say that previously anybody wanting to go from Sydney to Prague would have had to go Sydney to Dubai to London to Prague.. .and under the QF/EK partnership they could do it with one connection over Dubai instead…

    Shouldnt that have said Sydney to Singapore to London to Prague?

  25. @FriendlyReminder Thank you. Your comment was the only perceptive one here. The EK partnership hollowed out QF International — just the opposite of a success.

  26. Other than prestige of a premium partner
    I couldn’t believe when Qantas announced Dubai or understand their thinking
    when so many of their customers are coming from Asia
    Sure the massive First Class lounge and sebstational boarding process was pleasurable
    but I always felt like a fish out of water there
    I was never a big Singapore Airport fan
    Horrible boarding areas with massive lives bad sub par QF lounges but even culturally
    It seemed weird to me
    Agree Hong Kong would be my first however as long as there are plentiful award seats then I’m down for wherever
    Dubais ones silver lining more available award availability to Australia

  27. this is really pathetic ! So all SYD & MEL passengers who were able to fly to almost any major or secondary destination in Europe, Africa or Mideast with only one transit in DXB, now need to stop in SIN, then connect to DXB then to their destination. Or stop in SIN, then connect in LHR then to their destination. Absurd !! Qantas keeps bragging about nonstop Pert-London service, but if you’re originating in SYD or MEL, then you still need one transfer in Perth and one in LHR. So where was the logic in stopping the Dubai service ? In typical Airline fashion, a change for the worse is presented with a positive spin on it, to make it sound like its a change for the better. Anyone else see what i’m seeing ?

  28. Nathan, they’re just encouraging you to go back to the old days, and choose another airline. The airline choices have changed now. Emirates is a great choice as are most of the middle east airlines – as long as it’s not a 777.

    Only consider Qantas for Asia, (or London only in Europe).

  29. So many people are questioning what EK get from this…. how about the 50+ destinations across Australia & NZ plus they also code share on flights between Australia and Asia…

  30. I am a QF fan and think this is a great move, gives the options of traveling to the UK via SIN/PER – remember some of Australia biggest companies have offices in Singapore, Perth, and London; BHP, RIO, etc.Also you can still go via DXB, QF/EK code-share. Also with the A380 operating MEL/SIN/MEL, arriving back into Melbourne at 5.15am means no more delays with the MEL/LAX flights as this inbound aircraft will operate the LAX service. Good on ya QF!

  31. It depends on which city in Europe will be my final destination. If it’s a major hub like London, Paris, Amsterdam, Frankfurt, Zurich, etc… I prefer to stopover in SIN flying SQ as those cities are only one-stop flights from OZ. But if my final destination is a secondary city in Europe like Nice, Geneva, Lyon, Prague, etc… where there are no direct flights served by either SQ or QF, I prefer to stopover in DXB as Emirates have nonstop flights to those cities from Dubai. It boils down to the least number of connection and the least amount of time needed to get to my final destination.

  32. Nathan: I know it’s absurd to fly from SYD/MEL to SIN to DXB/LHR and then to the final destination in Europe for Qantas passengers. That’s why I’ll fly Singapore Airlines to major European cities, and Emirates to secondary European cities ditching Qantas altogether.

  33. @nathan
    Why? You can still book one stop flights to Europe on a Qantas ticket through Dubai – but it will be on an Emirates plane. The only change to the existing arrangement is previously you flew SYD/MEL-DXB leg on QF metal. The partnership means Qantas customers can book certain flights with Qantas, that are operated by Emirates. If you have a QF ticket and an EK plane, you earn the same Qantas points and Status Credits as you do flying a QF plane.

    An example is currently you can book a Qantas flight from SIN-MEL, which is actually on an Emirates A380. Its on their DXB-SIN-MEL route but QF sells tickets on the SIN-MEL sector. The only downside is you can’t use points to upgrade. You can book award flights, just not upgrade like you can on a Qantas plane.

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