QANTAS CHANGES SYDNEY-LONDON ROUTE AND EXTENDS EMIRATES DEAL
Written on the 31 August 2017 by Ben Hall
QANTAS (ASX: QAN) has extended its partnership with Dubai-based Emirates and announced a major change to its popular "Kangaroo Route" from Sydney to London.
As Australia's national carrier announced it will apply to extend its partnership with Emirates for five years, it also says its daily QF1 flight from Sydney to London will now go through Singapore instead of Dubai from March 25.
Qantas also says it will upgrade its existing daily flight from Melbourne to Singapore from an A330 to one of its popular A380 airbus aircraft, or superjumbo, from March.
Qantas chief executive Alan Joyce says the changes means the carrier can focus on building up its Asian customer base with more capacity to be deployed in the region.
"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 A380s flying into Singapore and meet the strong demand we're seeing in Asia," Joyce says.
He says the Emirates deal will generate an increased revenue pool for the partnership to share and generate cost savings of around $80 million a year from the 2019 financial year onwards.
The route changes mean that Qantas will have a spare A330 Airbus to be used elsewhere in the network which Joyce says "is a significant benefit".
"What we have been looking at for some time is how do we continue to grow the Asian market without buying additional capital and the fastest and best way we can do it is better utilisation of assets."
The airline says demand for flights between Australia and Dubai will be well served by the 77 weekly services that Emirates operates from Adelaide, Brisbane, Melbourne, Perth and Sydney.
Qantas announced last week that within five years, it will be able to fly from Australia's eastern states to London and New York.
"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," he said.
The two airlines will seek re-authorisation from regulators, including the Australian Competition and Consumer Commission, to co-ordinate price, schedules, sales and tourism marketing.
At around 1.40pm (AEST) Qantas shares were trading four cents, or 0.71 per cent, higher at $5.70.
Business News Australia
Author: Ben Hall