Qantas CEO: no alternative to Emirates deal if regulators balk

10-year alliance announced last month awaiting approval from Australian government
Qantas CEO: no alternative to Emirates deal if regulators balk
Struggling Australian carrier Qantas chief executive Alan Joyce (C) speaks to announce a major global alliance in Sydney on September 6, 2012 as Emirates president Tim Clark (R) looks on. Qantas announced the global alliance with Emirates that will involve moving its hub for European flights to Dubai from Singapore. (AFP/Getty Images)
By Reuters
Tue 09 Oct 2012 10:09 AM

Qantas Airways Ltd's chief executive said he was confident Australian regulators would approve a proposed alliance with Dubai's Emirates and warned that a rejection would leave it no alternatives for operating flights to Europe.

Australia's biggest airline announced a 10-year alliance with Emirates last month that is currently under evaluation by the competition watchdog, the Australian Competition and Consumer Commission (ACCC).

"There is no going back, and there is no alternative for us to make Europe work except this arrangement," Joyce told an audience in Canberra on Tuesday. "And that's fairly clear in the submission to the ACCC."

Qantas, which is ending a 17-year partnership deal with British Airways, agreed to the alliance with Emirates to shore up its loss-making international business.

The deal calls for sharing airport lounges and frequent flyer programmes, while Qantas will replace Singapore with Dubai as its hub for European flights.

The Australian government backed Qantas's move in a submission to the ACCC on Monday, saying the alliance would provide benefits for consumers and deliver competition to the aviation market.

"We believe we do have a solid case," Joyce said. "And the government agrees we have a solid case and that's why they put in their submission in the last 24 hours."

Qantas has been stripping costs out of its business after a year troubled by a record fuel bill, rising competition and a labour union that has opposed its spending cuts.

In August, it cancelled orders for 35 Boeing Co Dreamliner jets to further reduce costs after posting its first net loss in 17 years in the year to June 30.

Qantas shares rose 2 percent to A$1.28 on Tuesday, down from a 12 month peak of A$1.83 in March.

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