Is it me or has the failure of Qantas' alliance with Emirates to strengthen the airline gone completely under the radar?

12 replies

trevor

Member since 22 Jun 2013

Total posts 90

Is it me or has the failure of Qantas' alliance with Emirates to strengthen the airline gone completely under the radar? It appears Emirates has been the only winner. At the time, was it not heralded by Alan Joyce as something that would save Qantas from churning out continuous losses?? The alliance is coming up to a year old (out of only five). I acknowledge the high cost of fuel in recent years, the strong Aussie dollar and poorly performing European markets (in which Qantas probably has investments). However, the alliance was supposed to negate these influences, no? What Joyce has never acknowledged is that whilst the strong dollar is harmful to tourists coming to Australia, it's helpful to Australians travelling overseas. It is also surely helpful when purchasing oil. Surely Qantas also uses oil futures to hedge oil price risk anyway?

It would be more palatable if there were some sort of acknowledgement of the alliance's shortcomings to date. Better still, some sort of explanation.Or even a plan of action going forward...

I am sympathetic to how tough a job Alan Joyce has. He is clearly highly clever, and he took a bold, and frankly correct, position at the end of 2011 when he stood up to the unions and grounded the airline, however, patience with him must surely be running out? Whilst the results are yet to come out, I haven't seen any indication from any of the media that any positive news is expected to be announced - that's pretty obvious.

Surely a satisfactory plan of action will need to be produced for Joyce and other directors' positions to remain tenable? Thoughts?

TheRealBabushka

Member since 21 Apr 2012

Total posts 2,059

No doubt Qantas' strategy under Alan Joyce will be an interesting MBA case study on the misalignment of low cost and mainline operations. 

I don't think there is any other airline in the region (Asia Pac) or the world which has such a set up. I stand to be corrected. 

Silkair,Dragon Air and Firefly are "regional" carriers. Not low cost. Tiger and Scoot are marketed apart from SQ and MI, unlike QF and JQ, where interline arrangements are deemed enhancements to service offerings.

European flagships have largely ditched their low cost business.

Carriers in the Americas are distinctly one or the other - not both.

The Qantas Board still has a very 90s mentality, when clearly the world has moved on.

hutch

Member since 07 Oct 2012

Total posts 761

Qantas has 2 flights to Europe - with generally satisfactory loads. The EK deal allows them to serve many places in Europe one stop, on a good airline with much lower costs. If anything, they are not getting the most out of the deal as there flights are not well timed to connect with EK's.

In comparison, Qantas has many flights to Asia with little or no connections. They lack an asian partner of any substance (mostly Qantas's own fault). They have a cost base double that of SQ/EK and probably much higher than the growing Chinese carriers. They have an inferior product to Asia. They still have a fleet that is not fuel efficient. They are an end of line carrier. They have a large country, with many cities (with globally small populations) who all want to be serviced internationally. They have put too much capacity into the Domestic market and appear too pig-headed to adjust that (hopefully they will today).

The Emirates deal was essentially designed to fix Qantas's Europe problem... this may or may not have worked but we don't have the figures. But it is not the reason for the QF's problems. QFi has been losing money for a long time, this should not be a suprise to anyone (but the losses have been trending down)... the real issue at the moment, is QFd is not making the money to subsidise it.

Not saying Joyce shouldn't go, but Qantas needs more 'Emirates like' partners... not less.

Serg

QFF

Member since 12 Apr 2013

Total posts 870

I never believed and do not believe that marriage with Emirates doing any good for Qantas. They would be better of stick to BA. So much advertised “one hop to dozens European cities” is no more then myth. It is either no good connection (12 and more hours of layover) and to obtain such connection one need to fly Emirates via SIN on inferiors fleet with possibility to stop on Sri Lanka. Of arrival/departure from European city is at incredibly inconvenient tine. Direct fly to FRA was the means to serve all continental Europe (fly + train), but it was “unprofitable”. Why so? IMHO because of internal competition with Emirates!

TheRealBabushka

Member since 21 Apr 2012

Total posts 2,059

Hear hear!

hutch

Member since 07 Oct 2012

Total posts 761

As mentioned in post, connecting from a QF flight to an EK flight is no good due to poor connection times for the majority of European cities.

However, your second point stating that to "obtain such connection one need to fly Emirates via SIN on inferiors fleet with possibility to stop on Sri Lanka" is incorrect. There are many direct EK flights into DXB that connect onto mainland bound European services.

You then state that flight times into Europe are inconvenient but go on to state that  QF could serve mainland Europe through FRA  with plane/train connections....which may mean that FRA has a great arrival time, but would probably mean other cities have similar arrival times as the EK flight anyway.

Serg

QFF

Member since 12 Apr 2013

Total posts 870

Quick dummy quote MEL-FRA by QF

  1. 1:30 layover QF8409 + QF8087 (Emirates MEL-KUL-DBX departing 2:40am from MEL – bloody convenient!!!)
  2. QF9 + QF8043 – 4:30 layover in the middle of the night (23:25 – 3:55) – just about to be better then previous one
  3. QF9 + QF8045 – the same as 2, but 9 hours layover through whole night – marvelous!
  4. QF8405 + QF8045 – marvelous combination 1 and 3 albeit via SIN with bad points of both
  5. QF8405 + QF8047 – the same as 4 but with whopping 9:40 layover from 4:50am
  6. QF8407 + QF8045 – the only “reasonable” connection with 3 hours layover early in the morning
  7. QF8407 + QF8047 – same as above with 9 hr layover.

 

One needs to be very keen about Emirates to support such schedule! And besides only “reasonable” connection does not involve QF metal at all. So who is winner?

BTW Etihad offer beautiful connection to FRA.

FWTW – I going to Europe in few months and I could not found anything useful for my destination by QF/EK. My son now in Germany and when we buying ticket for him we finished with EY

TheRealBabushka

Member since 21 Apr 2012

Total posts 2,059

Suppose the QSA is lifted, how likely is BA to come back to the negotiating table?

Maybe a joint BA (influence) and QR (money) approach to outflank EK?

watson374

Qantas - Qantas Frequent Flyer

Member since 17 Aug 2012

Total posts 1,285

And screw CX, too.

Serg

QFF

Member since 12 Apr 2013

Total posts 870

TRB – yep, train is gone, IMHO it is not likely that BA will be interested anymore.

hutch

Member since 07 Oct 2012

Total posts 761

I doubt BA (or EK) have any interest in buying QF... what do they get? There are rumours of a QF codeshare on BA services from HKG-LHR though.

hutch

Member since 07 Oct 2012

Total posts 761

QF has provided you with a number of options - inlcuding one option (6) which has a very reasonable connection time. Do you want to the QF booking engine to spew out just the options that appeal to you? It is not forcing you to book options via KUL/SIN. These may appeal to leisure travellers who are happier with cheaper fares, whereas people who are time poor may be happy to pay more to fly less. Its up to the consumer.

"One needs to be very keen about Emirates to support such schedule! And besides only “reasonable” connection does not involve QF metal at all. So who is winner?" One point of the EK deal was to get people to fly EK. QF wins as they get paid for the sale, Emirates wins cause of feed and the customer partially wins due to greater options. Obviously there are trade-offs too. Based on your statement, VA should cancel their partnership with Ethiad cause they "don't win" putting customers onto EY.

The fact is Australian airlines will never again be able to serve many European destinations with their own metal. They will need partners who can serve those destinations. This may mean you will fly the whole way on another carrier... welcome to virtual networks.

Serg

QFF

Member since 12 Apr 2013

Total posts 870

Hutch,

I fail to see how QF wins here. Yes, there should be trade offs. But IMHO it should be in both directions. As I can see Emirates does not need Qantas – they unlike Qantas itself flying to all capitals in Australia. Qantas reselling their tickets getting peanuts and frankly if I am interested in route number 6 I rather buy directly from Emirates, they also cheaper for dollar or two. Why Emirates needs Qantas at first place? I reckon it is public stunt – if Qantas partner with Emirates than Australia’s public will believe that Emirates “good” company. This partnership is yet another nail in Qantas coffin.

You right – Qantas will never again regain it former glory. Nothing about virtual word, but something about deregulation. My prediction that Qantas eventually will adopt Air NZ model – will have one flight to London (for prestige) and make money on few flight to LAX (as least for now no competition). And yet Air NZ in better position – they managed to make this two flight as one. All other destination will be served by Asians and Middle East companies. Welcome to zoo that they call “global economy”.

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