Not good for Qantas

The Emirates-Qantas alliance has got off to a bad start for the Australian partner, with international passenger numbers falling significantly in the first month, according to the Sydney Morning Herald.

Qantas International carried 463,000 passengers during April, down 7.2% on the same period last year, figures released to the Australian Stock Exchange last week show. Its load factor, a key indicator of the airline’s profitability, also fell from 82.1% percent to 77.8%. The decline of 4.3 percentage points was larger than the 3.5% reduction in capacity.
Dubai-based Emirates tie-up with Qantas officially launched on 31 March with much fanfare and claims that it would provide passengers with the best network, lounges, frequent flyer benefits and travel experiences. It was considered a major shake-up of how airlines worldwide operated alliances, said the Sydney Morning Herald.

The partnership was particularly important for the struggling Australian carrier, which has recorded four consecutive full year deficits. Qantas claimed in March it had seen a six-fold increase in bookings to Europe on the joint network in the first nine weeks of sales under the alliance compared to the same period last year.

The number of Emirates customers booked to travel on Qantas’ domestic network also was almost seven times higher than under Qantas’ previous partnership arrangement in the same period.

The downturn in Qantas’ international passenger numbers during April also comes despite unprecedented growth in Australian outbound travel as the country enjoys one of the strongest economies in the developed world following the global financial crisis and a dollar worth more than the US dollar, according to the Sydney Morning Herald.

The poor monthly results have led analysts in Australia to question the viability of Qantas, with some commentators claiming the alliance with Emirates – which includes promoting the Dubai carrier for European, Middle Eastern and Asian legs – has diluted the brand’s national identity and made its presence in the international aviation industry less relevant.

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