Dubai: Australia’s struggling carrier, Qantas Airways, on Thursday confirmed in a statement to the Australian Securities Exchange that it is in talks with Emirates, besides other airlines, for a potential alliance.
“Qantas confirms it is in discussions with a number of airlines about potential alliances. These airlines include Emirates, among others,” the statement on the Exchange’s website read.
“At any one time, Qantas may be in contact with a wide range of companies about potential commercial cooperation. Qantas’ policy is not to comment on the nature or status of these discussions,” it added.
According to a report in the Australian Financial Review, codeshare negotiations between the two carries were at an advanced stage. “The companies are holding late-stage discussions,” it stated.
The news comes shortly after Emirates President, Tim Clark, last month said that the Dubai carrier has initiated talks about possible codeshares with Qantas, putting an end to speculation about Emirates seeking an equity stake in the Australian carrier.
“I had a chat with Alan Joyce [Qantas’ CEO] about codeshares and then the next thing we hear that Emirates is buying Qantas. It’s not true at all. We are not at all buying a stake in Qantas,” Clark told Gulf News in an interview in Beijing last month. He also said that Qantas was looking for somewhere to strengthen its international business. “So if it’s something that value adds both to their operations and us, we would look at it,” Clark said.
However, asked to comment on Qantas’ latest statement, an Emirates’ spokesperson said on Thursday in a statement: “Emirates does not comment on rumour or speculation.”
According to a report in the Australian Financial Review, Qantas would route many of its London and European flights through Dubai under a proposed tie-up with Emirates.
The Australian daily stated that the tie-up would see Qantas fly to Dubai for the first time and rely on its new partner to transfer passengers to destinations in Europe, the Middle East and Africa.
“Emirates doesn’t need Qantas as much as is true the other way around,” says aviation analyst Saj Ahmad of StrategicAero Research. “Equally, there’s no guarantee that Qantas would gain any rights to fly to Europe from Dubai — if anything, they will have to accept a watered down codeshare on Emirates’ flights but these finer details have still to be worked out.”
Embattled Qantas, which is primarily losing money on its international routes, has been struggling with spiraling fuel costs and worsening global conditions. It recently warned its underlying profit before tax was expected to drop from A$552 million last year to A$50-100 million.
To make matters worse, Virgin Australia Holdings — Qantas’ key domestic Australian competitor — has increased competition for Qantas on Europe routes through a recent tie-up with Abu Dhabi’s Etihad Airways, which currently holds around 5 per cent stake in Virgin Australia, with plans of doubling it.
“Qantas is in a downward spiral and is desperate to ward off losses as well as losing passengers to GCC airlines. It has little choice but to work with an Arab carrier since it is in no shape to compete directly,” points out Ahmad.
