Qantas / Emirates tie up (Partnership inc. Codeshare, Status)

[Fruitcake]

I think one of the most concerning issues here is that the ACCC is focussed on price as the lever. There are a number of other factors that influence consumers besides price - do they not get a look in? Competition isn't just about how much you can buy an airplane seat for!

The ACCC decision on VA/SQ can be found here:
Virgin Australia Group & Singapore Airlines - Authorisations - A91267 & A91268

And yes, it's broader than just price - the ACCC talks a lot about the value of amenities to business travellers beyond the price of the airfare.

 

[yohy?!]

Though it hardly seems fair that VA are allowed to forge alliances with massive carriers just because they're small yet QF may be refused the opportunity to profit from international.

ACCC wouldn't be the first to not believe that QFi is unprofitable given they run very high load factors and charge higher prices....

 

[Must...Fly!]

ACCC wouldn't be the first to not believe that QFi is unprofitable given they run very high load factors and charge higher prices....

Very good point too

There really is a lot more to this that isn't obvious at first glance. Although I am of the (light, unconvinced) opinion that the European routes have been marginal for some time and the increased competition TP from Delta and VA have taken away what was QF's big money spinner.

 

[nlagalle]

Qantas / Emirates tie up (code shares)

ACCC wouldn't be the first to not believe that QFi is unprofitable given they run very high load factors and charge higher prices....

And have a far higher base operating cost than nearly every carrier around..

Unless you can prove that QF cooked the books, it says on paper they are losing money. The rest is speculation.


Sent from AFF Mobile Edition

 

[eastwest101]

Unless you can prove that QF cooked the books, it says on paper they are losing money. The rest is speculation.

Correct - it is speculation, but we could all find bits of paper that said all was well with Rosella, HIH, Ansett, The Hastie Group, Leahman Bros etc etc - what does that prove?

 

[ComeFlyWithMe]

ACCC wouldn't be the first to not believe that QFi is unprofitable given they run very high load factors and charge higher prices....

Not sure which school of management you attended, but last time I checked the bottom line was more important than the top line...

 

[JohnPhelan]

so what happens if it doesn't get approved, do qf go crawling back to ba...

AJ has already made it clear - QF services will terminate in DXB, i.e. QF will cease flying into LHR.

Pax will then interline - probably on both EK and BA.

 

[mannej]

Qantas / Emirates tie up (code shares)

AJ has already made it clear - QF services will terminate in DXB, i.e. QF will cease flying into LHR.

Pax will then interline - probably on both EK and BA.

And when will this occur? I can see QF flights going the whole way to LHR via DXB instead of SIN


Sent from AFF Mobile Edition

 

[Must...Fly!]

That's IF the alliance isn't approved

Though I can't recall hearing that, source?

 

[Isochronous]

Even if QFi loses money, I wonder if anyone has done a study on the extent to which it implicitly enhances demand for the rest of the business units - e.g. connecting domestic flights, foreign tourists who then fly domestically while here, and the extent to which the profitability of QFF depends on people believing they can redeem for an international trip.

 

[The Rok]

Jeez, look at Etihad's seat utilisation, 96.6%. They are obviously doing well out of the VA Alliance.

 

[MarcB]

The ACCC decision on VA/SQ can be found here:
Virgin Australia Group & Singapore Airlines - Authorisations - A91267 & A91268

And yes, it's broader than just price - the ACCC talks a lot about the value of amenities to business travellers beyond the price of the airfare.

And yet, despite those type of benefits of the EK/QF alliance (lounges, greater earn/burn, better frequencies etc), Sims is saying there are NO benefits for consumers and that QF and EK are just talking it up.

 

[nlagalle]

Qantas / Emirates tie up (code shares)

Correct - it is speculation, but we could all find bits of paper that said all was well with Rosella, HIH, Ansett, The Hastie Group, Leahman Bros etc etc - what does that prove?

I think you'll find the difference is those companies were hiding their losses!

 

[browski]

Anyone who gets the insider tip with regards to the approval (or not) stands to make a tidy short term sum.

Would it be a stretch to suggest that the ACCC is presenting a negative spin so that it keeps the speculators at bay?

My feeling is that it will be approved and so it is a BUY time......................but then again I also thought that uranium was a good investment one month before the Japan disaster.

 

[ComeFlyWithMe]

AJ has already made it clear - QF services will terminate in DXB, i.e. QF will cease flying into LHR.

Pax will then interline - probably on both EK and BA.

i don't think this is correct. My understanding was that the LHR via DXB doesn't require any further approval as it is just a change of transit point, however traffic originating and terminating in DXB requires gov't approval, and the proposed joint services agreement requires ACCC approval.

Should the ACCC not approve, this only impacts the JSA, the rest is subject to government approvals and traffic rights. Of course, without the alliance being approved, it would be stupid to route traffic via DXB IMO.

 

[browski]

Of course, without the alliance being approved, it would be stupid to route traffic via DXB IMO.

Why so stupid?

 

[anat0l]

Why so stupid?

Well, I guess the arguments would be:

• Nothing really achieved - just a change of gateway. A rejection of the alliance would mean nothing significantly more than the "do-nothing" scenario.
• One of the key gripes people had here was DXB as a gateway compared to SIN. Many people prefer SIN; some even prefer it as the stopover (i.e. stopover vs. no stopover, although a stopover in SIN clearly "wins" over a stopover in DXB as it were)
• There was all the cultural sensitivities arguments - we won't go there now (too much blood spilled already) - but many people viewed that as a "disadvantage" to be outweighed by the advantages
• QF have already made a "hub" at SIN, whereas at DXB they would have to start all over again. Not such a bad thing if the alliance got up, because at least there's some homely support or a good reason to press ahead with a capital intensive step anyway.

 

[ajw373]

Why so stupid?

Because Dubai is not a major destination in it's own right, which is one of the reasons that Qantas hasn't served it in the past. So if they cannot offload their passengers to someone then why fly them there.

 

[markis10]

Why so stupid?

The TAM (total available market) for UAE destined travellers ex Australia is 3100 per month, or approximately 100 a day from the whole country, thats around 10% of the same TAM for Singapore destined travellers, without an alliance a seemless transfer to other destinations would not be possible so thats essentially what your looking at! They would be better flying to Turkey which has twice the TAM and no competition.

 

[oz_mark]

Because Dubai is not a major destination in it's own right, which is one of the reasons that Qantas hasn't served it in the past. So if they cannot offload their passengers to someone then why fly them there.

They may well still be able to offload passengers onto Emirates flights regardless, through interlines/codeshares etc. They just won't be able to co-ordinate sales/marketing etc to the same extent that they wish to.

One of the issues with their Asian flights was that they were largely timed for convenience of the European flights. Disconnecting this tie will be a good thing (as someone who has been held up waiting for connecting flights to arrived from London etc.)