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.
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.
Qantas Airways has just announced it is to open a new dedicated lounge for first and business class passengers flying on its daily services to Sydney and Melbourne from London Heathrow Terminal 3, which will open in 2017.
Currently, Qantas does not have its own lounge at London Heathrow and eligible passengers have to make use of the British Airways Galleries Club and First lounges at London Heathrow Terminal 3.
The lounge will occupy two levels of the airport terminal with capacity for 230 passengers. The new lounge is expected to be modelled on recent Qantas lounges in Hong Kong and Singapore. Construction will commence later this year.
Features of the new lounge will include:
• Australian chef Neil Perry’s Rockpool menu and dining experience;
• Full-service bar with Rockpool cocktails;
• Full bathroom facilities including showers;
• Business facilities; and
• Children’s zone.
Eligible members of Oneworld alliance frequent flyer programmes will also have access to the lounge and with Cathay Pacific also refurbishing its lounges at London Heathrow Terminal 3, Oneworld passengers will have a good choice of lounge facilities at London Heathrow.
This is also a welcome investment by Qantas in London. Qantas has previously reduced its daily services from London Heathrow from four to two daily. It also ended its partnership with British Airways in favour a partnership with Emirates with all services to Sydney and Melbourne routed via Dubai as a consequence. There have been question marks over its long term commitment to London which can be allayed by the news of this investment.
A familiar sight for anyone passing through Heathrow during the day is a pair of Qantas A380s parked at a remote stand near Terminal 3.
Whilst providing those on a mundane business trip to Frankfurt or Geneva the opportunity to dream about going somewhere else, it serves as an illustration of the hard economics for Qantas of competing against Middle Eastern and Asian airlines in the London to Australia market.
Currently, Qantas’ twice daily flights to Australia depart late in the evening and arrive in the morning at London Heathrow meaning hugely expensive assets are left on the ground all day doing nothing.
From 20 July 2014, as part of a broader restructuring of Qantas’ network in response to a deteriorating financial performance, Qantas flights to Melbourne will be retimed from a late evening departure to an early afternoon departure.
Qantas has just published its half year results. In the past week there has been a frenzy of speculation in the Australian media following prior warnings from Qantas that it would incur heavy losses resulting in a significant restructuring of the airline and possibly drastic changes to its route network.
The losses themselves are as feared with Qantas reporting a loss before tax of AUD$252 million. Qantas has announced significant job cuts and disposals of aircraft and deferrals of aircraft deliveries.
There has been much speculation about the future of Qantas daily Airbus A380 services from London Heathrow to Sydney and Melbourne, following anecdotal reports of weak demand on the London Heathrow – Dubai sectors of the London – Melbourne routes.
Qantas has today confirmed that the two daily London Heathrow services will remain. However, the London – Melbourne route (currently a late night departure from London and early morning arrival, resulting in significant downtime of nearly 17 hours for the aircraft) will be retimed from November 2014.
We do not yet know what the new times are. One possible option is to retime the departure to late morning, as Qantas used to have to Sydney and Melbourne when it had four daily services from London Heathrow.
Qantas published its annual results for the year ended 30 June 2013 last week. The airline posted a modest net profit of AUD$6 million after tax, which was a significant improvement over last year’s loss of AUD$206 million. This was primarily due a reduction in losses at Qantas’ International division, which prompted a significant reduction in capacity to Europe and the jettisoning of Qantas’ partnership with BA in favour of Emirates, by almost half to AUD$246 million.
Whilst the partnership between Emirates and Qantas is still very much in its infancy, it is curious that Qantas seems to have declined to give any clear revenue guidance on the partnership. In its results it gave only vague operational measures such as “2 times increase in codeshare bookings on EK network” and “3 times increase in EK bookings on Qantas Domestic network” compared to the partnership with British Airways and others. It is hard to draw any conclusions from such claims without seeing the detail behind the headlines.
Meanwhile, British Airways has remained upbeat on the performance of its last remaining Australian route, London-Singapore-Sydney.
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.