Qantas CEO Alan Joyce moots non-stop flights between London Heathrow and Sydney & Melbourne

This week’s Australian Financial Review magazine carries an extensive feature on Qantas. It is well worth a read. Much of the feature focuses on the work Qantas is doing to prepare for non-stop flights between London Heathrow and Perth.

Last year, Qantas gained a huge amount of favourable worldwide publicity when it announced non-stop flights between London Heathrow and Perth.

These flights are due to go on sale in April 2017 in advance of the route’s launch in March 2018. Whilst Qantas is still keeping some details under wraps, such its new premium economy seat, it has given the AFR some insight into its preparations for the new route. Specifically, Qantas is looking at the whole “ultra long-haul” in flight experience. This includes the design and timing of in flight meals, cabin lighting and in-flight announcements.

Also of note is that Qantas raises the possibility of non-stop flights between London and Sydney with the Ultra Long Range version of the Airbus A350-900 aircraft and Boeing 777-8X aircraft.

Qantas CEO Alan Joyce tells the Australian Financial Review:

“You walk before you run,” Joyce says. “We need to show that it can work, that the economics are what we’ve been told.” Joyce goes on to give his strongest indication yet that the Qantas board is considering ordering the A350-900ULR (entering service in 2018) or the B777-8X (from 2021) which, unlike the Dreamliner to date, could operate non-stop services from Sydney and Melbourne to London and New York. That could be the true game-changer.

“We’re still working through it, but they will be phenomenal aircraft,” is all Joyce will say.

It is also a safe assumption that Qantas is unlikely to give serious consideration to non-stop flights to Sydney and Melbourne without being able to fully assess the market response to non-stop flights between London and Perth. It is also a given that a ~20 hour flight between Melbourne, Sydney and London is a non-starter should the oil price return to $100 a barrel.

Airlines of course also love to talk about new routes and aircraft orders. It generates publicity and there is an element of politics when negotiations with rival manufacturers Airbus and Boeing are underway.

Next year, Qantas is also due to renew its partnership with Emirates which launched on 31 March 2013 (the competition authorities initially approved it for five years).

At the time Qantas was seen as the weaker partner having been under siege from all corners. It was engaged in a capacity war with its domestic rival Virgin Australia. It was scaling back its international route network, partly because it lacked suitable aircraft for long range routes. It had also gone through considerable internal troubles, notably very poor industrial relations with its staff.

Whilst the precise commercial terms of the agreement between Emirates and Qantas are confidential, the perception at the time was that Qantas had given Emirates access to its domestic network and corporate and frequent flyer base too easily for not enough in return. The tables have turned somewhat. Qantas has regained its confidence and now has a spring in its step. Meanwhile, Emirates has indicated that it is scaling back its growth ambitions and is reported to be reducing costs and looking for new sources of ancillary revenues. Qantas being able to operate non-stop flights to Europe from Australia obviously puts it in a stronger negotiating position with Emirates.

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