Heading in to the launch of the Emirates/Qantas strategic partnership this month some numbers were released by the Australian carrier regarding booking trends. Most notable, perhaps, is the claim that bookings to Europe are six times greater than the prior year. That’s a rather significant swing, and it is based almost entirely on dumping the inefficient connections via Asia in favor of better options available via Emirates’ hub in Dubai. And, depending on how one reads the tea leaves, it provides an interesting commentary on the value of global alliances.
Photo from the Qantas/Emirates flyover of Sydney Harbour courtesy of Qantas
It seems that the oneworld partnership between Qantas and both Cathay Pacific and British Airways was less that spectacular in pushing passengers into Europe; many of the destinations required an extra connection or less than desirable flight times. Or both. That’s not a great way to attract passengers. Emirates offers better connections and more than 50 destinations in Europe with a single connection from Australia. It is not all that difficult to believe that customers prefer that approach.
The bigger question from this data is what it means for the global alliances. Have they run their course?
Emirates doesn’t seem to want to join one and Qantas is more concerned with being profitable than with being exclusive to the oneworld group. Neither of those should be much of a surprise. Yet the partnership was quite a surprise when announced.
I still believe that the alliance serve a purpose. They provide great opportunities for joint marketing and certain customer benefits. But they are no longer the only way to build a solid international footprint. Focused bilateral partnerships (Air New Zealand and Cathay are launching a similar one) can be bar more valuable in many scenarios.
The times, they are a-changin.
Related Posts:
- How much does the Middle East alliance shake-up matter?
- Emirates, Qantas tie up on Australia service
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6 fold? Thats pretty hard to believe, either last years numbers were beyond crap or they have come up with a very creative way to count passengers. I dont doubt there has been improvement but I dont buy it.
April fools?
No, this is not an April Fools joke.
I don’t know if the number is based on QF flight numbers versus partners or what, but that’s what they’re claiming.
This is only an ancillary comment, and maybe this is common knowledge, but I didn’t realize until just now [looking at my globe] that HKG is very close to the great circle between SYD and LHR. In fact, I would have guessed that DXB was closer than HKG to this great circle.
“The bigger question from this data is what it means for the global alliances. Have they run their course?”
That’s a bit of a stretch…
However, we probably will see opportunistic hookups (like this one) outside of alliances where it makes financial sense.
Alliances won’t be a hindrance if there is money to be made with an airline outside of an alliance.
I’m not entirely convinced that the alliances won’t hinder partnerships. Certainly airlines with greener pastures elsewhere are going to be less inclined to focus and invest in the alliance benefits and partnerships. That’s not to say the alliances are going to close up shop any time soon. But I do believe that they are decreasing in importance in the industry overall.