End of an era for the Kangaroo Route as Qantas calls Dubai home

Qantas & Emirates Partnership launches 31 March 2013
Qantas & Emirates Partnership launches 31 March 2013

There probably isn’t an airline route in the world where travellers have more choice of airlines routings than London to Australia. As non-stop routes between London and Australia remain a technical impossibility and fuel prices mean that is likely to remain the case, a stop en route has always been required.

The traditional route between London and Australia has previously been the “Kangaroo Route” via Singapore, with the option of other Asian cities such as Bangkok and Hong Kong. However, rapidly growing Middle Eastern carriers such as Emirates and Etihad have used the geographic location of their hubs and rapidly expanding route networks to their advantage to offer convenient one stop connections between any two points in Europe and Australia. Other airlines, such as China Southern and Garuda are also actively targeting the UK – Australia market.

Nobody knows this more than Qantas which has faced a considerable loss of market share in the UK – Australia market in recent years. Based on its own submissions to the Australian Competition and Consumer Commission its share of Australia – UK traffic has fallen from 34.4% in 2001 to just over 25.5% in 2012 whilst Emirates’ share has grown from 4.6% to 21.2%. Qantas has also reduced the number of daily flights from London to Australia from four to two and is suspending its only other European route, Frankfurt-Sydney, from 15 April 2013.

Qantas is at a disadvantage partly due to higher operating costs and geography. A combination of the two curfews at London Heathrow and Sydney Kingsford Smith mean that aircraft from Sydney arrive at Heathrow at approximately 5am and don’t depart the airport until 10pm and it costs a lot of money to leave aircraft on the ground all day. Passengers travelling to/from cities in Europe other than London and Frankfurt also require a two-stop connection via Singapore and London/Frankfurt which simply isn’t competitive against a one-stop connection in the Middle East.

Last year, Qantas adopted a “If you can’t beat them, join them” approach and ended its long-standing joint venture with British Airways (the relationship goes back to one of BA’s predecessor airlines BOAC) under which the two airlines operated a form of “scissor hub” in Singapore in favour of Emirates.

Tonight, for the final time, Qantas flights QF2 and QF10 will depart from London Heathrow to Sydney and Melbourne respectively via Singapore. From tomorrow, 31 March 2013, these flights will be routed via Dubai.

British Airways, which continues to fly daily to Sydney via Singapore (and in a competitive response will deploy its latest Boeing 777-300 aircraft on the route from 31 March) has also chosen to partner with Cathay Pacific to serve destinations other than Sydney in Australia via a codeshare from Hong Kong. However, the relationship (for now at least) only extends to placing each other’s codes on flights and does not involve co-ordination of schedules and pricing, as was the case with Qantas and BA.

As Qantas has changed the timing of many of its flights from Singapore to Australian cities, these are no longer suited to onward connections from London – Singapore flights. The severing of the relationship between BA and Qantas (reported in the Australian press to be quite acrimonious) is symbolic, if not for air passengers at large, given that five years ago the two airlines were in merger talks and until late 2004 BA owned a 18% stake in Qantas.

BA has made it clear that Australia is no longer an important market for the airline and has its sight set on growth in Asia. Whether BA continues to serve Sydney remains to be seen. The loss of Qantas as partner does mean BA loses access to Qantas’ significant corporate and frequent flyer base and distribution network in Australia and BA may decide to cut its losses rather than put significant marketing effort into Australia.

Qantas and Emirates will mark the launch of their partnership with a flyeover of Sydney Harbour at approximately 10.25 AEST on Sunday 31 March. More details about the Qantas/Emirates partnership are on the Qantas website.

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