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Mon 3 Jun 2013 08:17 AM

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Emirates tie-up fails to boost Qantas performance

Australian partner reports significant drop in passenger numbers following start of alliance

Emirates tie-up fails to boost Qantas performance
(AFP/Getty Images).

The Emirates-Qantas alliance has got off to a bad start for the Australian partner, with international passenger numbers falling significantly in the first month.

Qantas International carried 463,000 passengers during April, down 7.2 percent on the same period last year, figures released to the Australian Stock Exchange on Sunday show.

Its load factor, a key indicator of the airline’s profitability, also fell from 82.1 percent to 77.8 percent. The decline of 4.3 percentage points was larger than the 3.5 percent reduction in capacity.

Dubai-based Emirates tie-up with Qantas officially launched on March 31 with much fanfare and claims that it would provide passengers with the best network, lounges, frequent flyer benefits and travel experiences. It was considered a major shake-up of how airlines worldwide operated alliances.

The partnership was particularly important for the struggling Australian carrier, which has recorded four consecutive full year deficits.

Qantas claimed in March it had seen a six-fold increase in bookings to Europe on the joint network in the first nine weeks of sales under the alliance compared to the same period last year.

The number of Emirates customers booked to travel on Qantas’ domestic network also was almost seven times higher than under Qantas’ previous partnership arrangement in the same period.

The downturn in Qantas’ international passenger numbers during April also comes despite unprecedented growth in Australian outbound travel as the country enjoys one of the strongest economies in the developed world following the global financial crisis and a dollar worth more than the US dollar.

The poor monthly results have led analysts in Australia to question the viability of Qantas, with some commentators claiming the alliance with Emirates – which includes promoting the Dubai carrier for European, Middle Eastern and Asian legs – has diluted the brand’s national identity and made its presence in the international aviation industry less relevant.

“The glaring weakness of the Qantas to Asia offering, of having no control over any full service on carriage beyond Singapore or Hong Kong or Shanghai is obvious,” Crikey journalist Ben Sandilands wrote on Sunday.

“If Qantas seriously expects such traffic to down gauge to the Jetstar [Qantas’ low-cost sister carrier] experience at Singapore or Hong Kong it is unworthy of credibility.

“It has not just handed much of its Australian presence on the Europe routes on a platter to its competitors, but provided Singapore Airlines through Virgin Australia and Cathay Pacific on its ownsome [sic] golden opportunities they are not ignoring.”

Emirates has not released its April figures.

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RAH 6 years ago

"It was considered a major shake-up of how airlines worldwide operated alliances."

Who exactly considered this a "major shake-up"?

Was it your circle of friends, meeting at a pub over a glass of chilled white, who saw it as such and you decided it was worth reporting it that way?

This alliance is hardly a new innovative idea nor did other airlines worldwide review their current alliances due to this new alliance. So I repeat, who exactly considered this alliance to be a major shake-up to the entire airline industry?

Melbourne Pilot 6 years ago

I suggest you check your facts. Qantas did not report 4 years of deficits! It was only 1 year (being last year).

Sloppy journalism!