Qantas boss Alan Joyce says its alliance with Emirates will help counter stiff competition from rivals such as Singapore Airlines and Cathay Pacific but he will not bring forward long-term targets for its international operations.
Launching the alliance on Sunday, Mr Joyce said the airline had experienced a sixfold increase in bookings to Europe on the joint network in the first nine weeks of sales compared with the same period last year.
The tie-up is mostly focused on routes to Europe but includes services to North Africa, the Middle East, Asia and New Zealand. The airlines still need approval for trans-Tasman flying from the New Zealand government.
Mr Joyce said its fares on routes to Europe would drop on average by about $100 as a result of the alliance. Flying to Europe via Dubai rather than Singapore would reduce transit fees, landing fees and extra flight charges.
”We will be going through all the fares and aligning them and deciding what is the appropriate fare … in the various markets,” he said.
The two airlines’ fares will be aligned over the next few weeks, removing the discrepancy evident over the past few weeks.
A Qantas A380 and another superjumbo from Emirates flew in formation above the Opera House in Sydney on Sunday to mark the beginning of the alliance. The pilots reportedly practised by flying the route dozens of times in sophisticated flight simulators.
Despite the bullish response from travellers, Mr Joyce said Qantas would not look at expanding its premium international operations until they met their long-term targets, including breaking even by the 2015 financial year.
But he emphasised that the alliance would bolster Qantas’ ability to maintain two daily services between Australia and London via Dubai.
”The Dubai-London is actually one of the top-selling sectors with the Emirates code on it,” he said. ”Emirates said we could deal with more capacity on Dubai-London.”
Some industry insiders have questioned Qantas’ ability to fill seats between Dubai and London. Many passengers flying from Australia will get off in Dubai to catch connecting flights to destinations in continental Europe.
The competition regulator has also imposed conditions on Qantas and Emirates on the trans-Tasman route, which includes maintaining capacity on four overlapping routes.
Mr Joyce said the limitations on the trans-Tasman route would not allow Qantas to shift flights from the four overlapping routes to start up new services.
Qantas has suggested the alliance could allow it to start new services between Adelaide and Auckland.
”We are still looking at opportunities on the Tasman,” he said.
Singapore Airlines and Cathay Pacific – the main rivals to Qantas and Emirates – have already been reacting to the alliance with more competitive fares on flights to Europe.
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