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Qantas Cast Aside Due To Etihad Partnership?

Etihad has little reason to continue playing charades with Qantas now.
Etihad, COMMENT, Business Trends

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Etihad Airways has little reason to continue playing charades with Qantas now that it has partnered with V Australia. The Australian-UAE market alone is huge. Factor in the swathes of transfer traffic from Europe descending on Abu Dhabi, Dubai and Doha and the numbers swell even further.

The immediate problem Qantas faces is not so much launching its own direct flights to Abu Dhabi (or even Dubai) but what it would fly there with.

Qantas is unable to use its A380s because Emirates has a far superior product, commands (and gets) higher paid fares for its services and with Qantas reconfiguring its long haul fleet with lower yield passengers, costs of launching such services would probably never be covered.

Qantas missed the boat more than once with the 777-300ER and this would have been the perfect machine to compete directly with Etihad and V Australia, alas, its too late for them and having procrastinated over the 787 deliveries, first deferring, cancelling and then trying to get back some early slots, the airline is relegated to either sitting as a lame duck at Etihad’s side or pulling out all together.

Who knows, if the partnership works, who is to say V Australia wouldn’t ask the UAE Government for freedom rights into Europe? That would be a move that would damage Qantas even more than at present – Qantas already believes the folly that the likes of Emirates is propped up by the state rather than acknowledge that it is simply a much better run and profitable airline.

The one option Qantas does have would be to try and snare either Emirates or Qatar Airways as likeminded partners. Given Qantas’ opposition to Emirates flooding of the Australia market, that doesn’t look like a deal ready to be inked anytime soon. Qatar Airways and Doha has, at best, marginal transfer traffic and Qantas would gain very little additional business unless a deal is structured to favour their interests.

V Australia is sitting pretty and it knows that it has outsmarted Qantas – and not for the first time.

This column was written by FBE Aerospace analyst Saj Ahmad, the views expressed are his own.

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