Dubai: The Emirates-Qantas tie-up on the Australia to New Zealand network could kickstart a much-needed increase in fares on the key trans-Tasman route.
“Over the past 10 years, we’ve been seeing a trend in declining airfares on the trans-Tasman route,” Tony Webber, Associate Professor at University of Sydney and former Chief Economist for Qantas, said.
Current airfares are unsustainable, Webber said. The basic airfare is so low that there needs to be a force or change to increase it.
Emirates and Qantas announced on Wednesday they had opened bookings to customers on their joint New Zealand network.
Emirates operates 28 flights a week to New Zealand.
In a statement on Wednesday, Emirates said it would be increasing capacity on all flights to Auckland from October 1. The airline said all flights on the Auckland route would be operated by an A380.
Qantas operates a twice-daily A380 service from Dubai to Australia with connections to over 100 flights per week to New Zealand, the statement said.
Webber said the trans-Tasman tie up is most significant for Qantas because of passenger volume.
“The passenger market on the trans-Tasman route is between 15–20 per cent of total Qantas international passengers,” Webber estimated based on the popularity of route and Qantas market share.
The deal is very important for Qantas as it gives the airline capacity consolidation, Webber said. “There is too much capacity in the market on the trans-Tasman route,” he said.
With Emirates announcing that it will continue to operate its 28 flights on the route, Webber said it could lead to a reduction of wingtip flying. Wingtip flying occurs when flights on the same route take off and land between 5 and 20 minutes of each other.
“The likelihood is that Jetstar and Qantas will reduce capacity that competes with Emirates,” Webber said.
Due to time constraints, Emirates were unable to comment by deadline.
