Abu Dhabi: Pricing, profitability, and demand will be the main challenges ahead of Australian airline Qantas as it readies to operate the world’s first direct route between Australia and Europe.
On Monday, Qantas confirmed it plans to operate non-stop flights from Perth to London in March 2018. At a journey time of around 17 hours, the route is expected to be the third-longest passenger flight in the world, and the longest flight on the Qantas network.
But pricing, which is yet to be announced by Qantas, is going to be a key factor for this 14,498-kilometre-route.
“Demand will ultimately be driven by price. If this was Sydney-London, then they could charge a premium. But with Perth, unless people are connecting in from other Australian cities, Qantas will have to make fares attractive,” said Saj Ahmad, chief analyst at StrategicAero Research in the UK.
He said Perth does not have as much high-yield traffic potency like Sydney, Melbourne, or Brisbane.
Given the drop in oil prices over the past two years, fuel costs will not be a huge issue for Qantas, which means fares can be more competitive.
“The real challenge for Qantas is whether it has the temerity to nix the route if demand, pricing, and profit do not emerge. That, right now, is far too early to establish,” Ahmad said.
Seats on the Perth-London flights will go on sale in April 2017 for the first services in March 2017. The Boeing 787-9 Dreamliners used on the route will carry 236 passengers across Business, Premium Economy, and Economy classes.
Once launched, other airlines are likely to keep a close eye on the Perth-London route, especially the likes of British Airways (BA) and Virgin.
“BA and Virgin already have 787-9s so they could be spoilsports and launch the same route within six months if they wanted to steal Qantas’ thunder here. Whether they will remains to be seen. But I don’t yet see anyone trying to copy Qantas just yet because there’s no guarantee the route will be a major money spinner,” Ahmad said.
Travellers, after all, still have plenty of other cheaper options for non-stop flights between Australia and Europe, with the GCC (particularly Dubai, Abu Dhabi, and Doha) being a key hub that many Australian travellers use for transit.
In a statement on Monday, Alan Joyce, Qantas Group Chief Executive Officer, said the route was “game-changing.”
“This is a game-changing route flown by a game-changing aircraft. Australians have never had a direct link to Europe before, so the opportunities this opens up are huge. A direct flight makes travelling from the UK to Australia a much more attractive proposition to millions of people,” Joyce said.
He said the route is expected to appeal to European travellers who want a non-stop link to Australia, and will see Australian travellers from across the country use Perth as a hub to reach London.
