Qantas shares up on Emirates tie-up
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SYDNEY, Sept 6 AAP
September 06 2012, 12:40AM
Qantas Airways shares have risen almost five per cent after the airline announced a deal with Emirates that leaves London as its sole European destination.
The 10-year partnership between the two carriers, unveiled in Sydney on Thursday, will result in Qantas shifting its European hub to Emirates' home airport in Dubai.
From there, Qantas passengers headed to destinations other than London can transfer to Emirates flights carrying the QF airline code as part of a wide-ranging partnership that also includes reciprocal frequent flyer benefits.
Starting April 2013, Qantas will fly daily from Melbourne and Sydney to London via Dubai.
Passengers wishing to buy Qantas tickets to Europe from other Australian capitals, such as Perth, Adelaide or Brisbane, will be flown on Emirates aircraft.
The Australian flag carrier said it would cease flights to Frankfurt, its only other European destination, and end codeshare arrangements with Cathay Pacific to Rome and Air France to Paris.
The long-running joint-services agreement between Qantas and British Airways will also be terminated.
Qantas chief executive Alan Joyce said the new global aviation partnership was a key plank in turning around the airline's struggling international division, which reported a $450 million loss in 2011/12.
"The deal we announced today is the major step in turning that business around," Mr Joyce told reporters at the official announcement on Thursday.
"It is a major step in us getting to our target of breakeven by the 2015 financial year and a major step in us growing that business again.
"In terms of jobs, the headline here is: this is great for jobs for Qantas, great for jobs in Australia."
The market welcomed the news, with Qantas shares rising 5.5 cents, or 4.89 per cent, to $1.185 by 1211 AEST. Earlier, the stock reached an intraday high of $1.205.
Emirates chief executive Tim Clark said the tie-up with Qantas was the largest partnership the carrier had ever done with another airline.
"By establishing this partnership, we are providing our passengers with additional connectivity in Australia and the region," Mr Clark said.
Mr Joyce said the tie-up would also allow Qantas to reschedule its flights into Hong Kong and Singapore, allowing better connections to the rest of Asia with its airline partners such as low-cost carrier Jetstar Asia out of Singapore.
"It solves our Europe issue but it helps dramatically in Asia and it gives us an unbelievably stronger proposition in the Asian market," Mr Joyce said.
