On 16 November 2020, Qantas will mark 100 years since its incorporation as Queensland and Northern Territory Aerial Services Ltd.
In the first part of our series on Qantas in the UK, we looked at its early co-operation with Imperial Airways and BOAC. In part two we looked at how the Boeing 707 established Qantas as a round-the-world airline. Part three looked at how the Boeing 747 transformed flying to Australia.
“No British Airways ownership of our Qantas. Piss off poms.”
By the end of the 20th century Qantas remained the dominant airline carrying passengers to Australia with an around 40% share of international traffic.
This was owed, in part, to a close relationship over many decades with BA and its predecessor airlines Imperial Airways and BOAC.
In 1993, when BA had ambitions to be a major global airline, it beat Singapore Airlines to acquire a 25% stake in Qantas in ahead of its full privatisation in 1997.
Not everyone was enamoured with the idea. One particularly dissatisfied Australian put up a sign “No British Airways ownership of our Qantas. Piss off poms.” at Sydney airport.
BA and Qantas formed a joint-business in 1995 to co-operate on Europe – Australia services. This involved co-ordination of fares, schedules and many joint airport lounges throughout Asia. BA and Qantas also shared aircraft, with BA leasing 7 Boeing 767 aircraft to Qantas.
At the turn of the century, with a focus on reducing complexity in its operations, BA turned its attention away from Australia. To reduce the amount of debt on its balance sheet BA also sold its stake in Qantas.
Meanwhile, Qantas saw its future in the Airbus A380 carrying ever larger numbers of passengers to Europe and the Middle East. Towards the end of 2000, Qantas ordered 12 aircraft. A further 8 were ordered in 2006 (International Herald Tribune), but this was subsequently cancelled.
BA and Qantas explored a merger in 2008. The deal was pulled after the two airlines could not agree on the relative shares in the combined business. Given the physical distance between the UK and Australia, it is hard to see how the merger could have achieved the synergies BA has done with Iberia. Legally, it would have to had to comply with the Qantas Sale Act which caps foreign ownership of Qantas. It could have also faced huge political opposition in Australia.
Qantas Calls Dubai Home
The dynamic of the UK – Australia market changed considerably with the rise of Middle Eastern airlines.
Emirates had a dramatic impact on the market. Aided by the Airbus A380 it opened up countless one-stop connections between Africa, Europe and Australia that Qantas could not offer.
The two airlines engaged in a war of words. Former Qantas Chair Margaret Jackson claimed in 2005 that “to suggest that Emirates is competing on similar terms as commercially-run airlines like Qantas is, quite frankly, fiction.” (Financial Times). Emirates hit back branding Qantas “one of the world’s most anti-competitive airlines.”
Qantas struggled to adapt to changing market dynamics. In 2011, Qantas staff and trade unions opposed a change in the airline’s strategy. In one of the most dramatic escalations of airline industrial relations tensions, Qantas CEO Alan Joyce grounded the airline worldwide with no notice.
With Qantas facing a dramatic loss in market share, it adopted a “If you can’t beat them..” approach. It tore-up its joint-business with BA in favour of a new deal with Emirates in 2013. Four daily Qantas services from London Heathrow to Australia via Asia were cut to two, all via Dubai.
Qantas was criticised for appearing to having handed passengers to Emirates too easily, something it tacitly acknowledged by reinstating a link between Heathrow and Sydney via Singapore.
For a time it felt that Qantas was giving up on the UK. And then came Project Sunrise, the name given to one of the most hyped aircraft tenders in history.
Qantas launched a daily non-stop service from London Heathrow to Perth in 2018 with Boeing 787-9 aircraft.
This was considered a commercial and operational success. Qantas then launched a very public research project and tender for aircraft capable of flying from London to the East Coast of Australia non-stop.
In what was partly a PR stunt, in November 2019, a Qantas Boeing 787-9 aircraft, registration VH-ZNJ Longreach flew non-stop from Heathrow to Sydney in 19 hours and 19 minutes.
Qantas had selected an ultra long-range variant of the Airbus A350-1000 as its preferred aircraft. Qantas was due to confirm its order by the end of April 2020 to secure delivery of aircraft by 2023. This has been postponed.
That is not to say it won’t ultimately happen. Qantas views the ability to operate non-stop flights between Europe and Australia as a competitive advantage. Its rivals in Asia and the Middle East do not have the traffic rights and European airlines have no interest in ultra long-haul aircraft.
With Australian borders expected to remain closed until late 2021 and Qantas’ International division without a CEO, it is going to be some time before we see whether Qantas finally breaks one of the final frontiers of civil aviation.