Qantas to Team Up With Emirates, Drop British Airways

Qantas announced some interesting news yesterday: the Australian airline will be terminating its joint business with British Airways starting March 31, 2013, and beginning a new global partnership with Emirates.

The Qantas-British Airways partnership has been in place since 1995, and the two airlines will continue to operate some bilaterally codeshared flights – and Qantas also says is plans to remain a part of the Oneworld alliance – so we won’t see a death match over dominance of the routes between Australia and the UK just yet.

Qantas CEO Alan Joyce said that the new partnership with Emirates is a strategic shift for a changing travel marketplace and new global operating conditions. What that means is that Emirates has pretty much been beating Qantas hands down on its bread-and-butter Kangaroo Route from Australia to the UK thanks to Emirates’ hub in Dubai and the myriad connections to all corners of the globe that it flies out of there.

Under the new agreement, which stipulates a 10-year partnership, Qantas will move its hub for European flights to Dubai (instead of Singapore and Hong Kong where it currently connects between the UK and Australia) and enter a new extensive commercial relationship with Emirates.

Qantas will launch daily A380 service from both Sydney and Melbourne to London via Dubai. Together, both airlines will offer a total of 98 weekly services between Australia and Dubai alone and Qantas will be the only other airline operating out of Dubai International Airport’s Terminal 3 and its purpose-built A380 concourse. That seems like a lot of capacity, but Emirates President Tim Clark says that Australia is one of Emirates’ top 3 overall destinations.

The new hub means that, rather than having to continue straight to London or Frankfurt, Qantas customers can now take advantage of Emirates’ 70 destinations across Europe, the Middle East and Africa when connecting through Dubai. In turn, Emirates customers will have easier access to Qantas’ 5,000 weekly domestic flights to 50 destinations. The two carriers also plan to coordinate their services between Australia, New Zealand and Southeast Asia, one of the regions where Qantas plans to develop its routes further with business travelers in mind rather than using its hubs there as way-stations on the Kangaroo Route. Qantas plans to shift its schedules on these routes so that travelers can connect to other destinations in Asia more easily as well.

Perhaps the most interesting development: the Emirates and Qantas frequent-flyer programs will be aligned, so flyers can earn and redeem on either/both airlines, and the two carriers will provide reciprocal access to elite status benefits including priority access, lounge access and other perks.

Qantas CEO Alan Joyce spoke about the new partnership in no uncertain terms, saying: “This is the most significant partnership the Qantas Group has ever formed with another airline, moving past the traditional alliance model to a new level.”

So what does all this really mean, and are we moving beyond the traditional alliances into a world of hodgepodge bilateral airline partnerships? Or is this perhaps the start of a fourth alliance?

I hope this partnership pushes Emirates to officially join the Oneworld alliance so there are more options for redeeming American and British Airways Avios. Right now Emirates redemption options are limited to partners like Korean Airlines (transfer partner of Chase Ultimate Rewards) and, later in 2012, Alaska Airlines.

I also think this may push Virgin Australia and their partner Etihad to join SkyTeam now that competition is building down under. Time will tell, but I don't think partnership will be a bad thing for frequent flyers who will hopefully get more ways to earn and redeem miles.
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