The next credibility tests for the new world of Qantas, You’re the reason we fly Emirates, will be what it does in Asia and to New Zealand.
These areas were given only brief mention in yesterday’s announcement about the new Qantas European hub at Dubai, which will physically exist as footnote appearances by Qantas A380s flying twice daily each way between Dubai and London and Australia (with one set of flights each for Melbourne and Sydney).
Emirates will also play a physically large role on in the Qantas, You’re the reason we fly Emirates operation across the Tasman because Qantas will apparently code share on daily A380 rotations between Auckland and both Sydney and Melbourne, and in the frequent 777-300ER operations Emirates also uses on the NZ routes from Brisbane as well as Sydney and Melbourne.
The Emirates association with Qantas in SE Asia will be its existing 777-300ER flights between Australian cities and Singapore and Bangkok. Take note that economy class in an Emirates 777-300ER is miserably tight compared to the spacious arrangements in its A380s, and its business class in the Boeing is disappointing in so far as the inferior geometry of the seating goes.
Qantas has however vowed to significantly improve its frequencies and connections between Australia and Singapore and Hong Kong, raising fears that for Bangkok the answer if you want quality and Qantas FF points will be Emirates, and if you want cheap and ghastly, it will be Jetstar, which of course it won’t be since the bargain hunting market will fill Thai International flights, which trade on a combination of full service no extras low fares in economy, a formula unknown to Jetstar.
Singapore and Hong Kong are however, different, both from Bangkok and each other, in their marketing charcteristics. Singapore is a Jetstar to Jetstar Asia hub, or for those into sadism, a Qantas to Jetstar hub, and on any rational analysis of the reported figures, it is a dog not a star when it comes down to the comic book fantasies of Boston Consulting Group influenced executives such as those that have brought the current Qantas to its knees and then given it a good hard kicking for failing to perform.
In Singapore, Singapore Airlines and its Virgin Australia alliance partner, have the quality product from full service economy to premium cabins wrapped up. Not even Emirates is likely to touch them in service or frequency, and the clever use of SilkAir, the single aisle, full service Asia regional brand of Singapore Airlines, that also provides Virgin Australia with its Darwin-Singapore lift, is only just starting to make is presence felt in the Australia-Asia market.
In Hong Kong, Cathay Pacific is similarly dominant in association with its full service subsidiary Dragonair, in linking the world’s largest capital raising market with the world’s largest ‘new’ economy in the PRC, and with a radius that readily includes Taiwan, Vietnam, Korea, Japan, and the Philippines.
The critical question for Qantas, for which its customers might hope it will have a critically good answer, is how it will serve its full service business and leisure customers with connections out of Hong Kong? In theory the answer is with Cathay Pacific or Dragonair, but if you believe that you are too wet behind the ears to start travelling in China.
The Qantas plan for a Jetstar Hong Kong operation in association with China Eastern, isn’t just poison when it comes to relations between Qantas and its putative oneworld noworld alliance partner Cathay Pacific, but anathema to most Australian business travellers.
The relevance of connectivity over Hong Kong is also under siege by China Southern’s ambitions for vastly higher capacity services to Perth, Melbourne, Sydney, Brisbane and Cairns.
It is true that it is immensely difficult for any non-China airline to find the right commercial relationship that will give it good participation in the PRC market, but it is manifestly true that Jetstar Hong Kong isn’t ever going to be an answer acceptable to the higher yield market that Cathay Pacific comprehensively addresses.
Qantas CEO Alan Joyce yesterday referenced ‘fleet changes’ to better suit its Asia ambitions. This may, if reason prevails, mean taking the 787-8 Dreamliners that were going to go to Jetstar from the second half of next year back into the Qantas fleet instead.
Provided the 787-8 becomes reliable, and meets all of the promises, it will give Qantas a chance in Hong Kong to compete with the amenity of Cathay Pacific’s very well appointed A330-300s, and their A350 successors, from around 2016.
Similarly, on services to Singapore, the 787-8 would give Qantas something new, and hopefully still exciting, to compete with the range of A380s, 777s and A330s Singapore Airlines now flies to Australian cities, and before it takes delivery of the large fleet of 787-9s and A350-900s it has on order.
Although it makes a lot of aviation fan boys choke, the A380 is a potent and superbly comfortable jet for a flight from Australia to Singapore, Hong Kong or Bangkok, and Emirates didn’t order 90 of them for fun, but to replace 777s on routes where growth and slot restrictions combine to drive operators to increase the unit size of the jets as an alternative to quitting future markets because someone else turns up with A380s.
If the Emirates world view means anything, and so far, it has made its critics look silly, the Emirates-We-fly-you-because-of-Qantas network, will also operate A380s between Australia and Bangkok and Singapore wherever it flies 777s now or in the near future, and it will probably do this by 2020 if the ‘Asia Century’ economic boom isn’t delayed or interrupted between now and then.