Qantas CEO Alan Joyce said something interesting about what happens on the Dubai routes to Europe after 2016 on the ABC TV Inside Business program this morning.
The Boeing 787-9s would, he said, fly to Dubai and beyond into continental Europe.
But that actually depends on a number of things.
1. Qantas has to exercise its options or purchase rights for the jets around 18 months before it intends to so use them, since it doesn’t hold any firm orders for them anymore since it announced their cancellation on 23 August.
2. Emirates has to co-operate.
3. The 787-9 has to deliver on its promises, and as a smaller jet nevertheless be competitive on a cost basis against the Boeing 777-300ERs flown by Emirates, as well as the A380s it uses for both trunk feed into Dubai and beyond to what will be then be much more than the seven European cities to which it now flies A380s.
4. The EU has to deliver on the traffic rights. It is one thing to have unlimited access to Dubai, and another to recover or initiate the necessary access to cities Qantas has down the years abandoned or never previously served.
This is not a criticism of the Qantas ambition, but it is a reality reminder that there can be issues with traffic rights between Australia and Europe and these are not negotiated between airlines but governments, and those governments in turn may or may not have rules as to who gets what part of which entitlement.
By the time, assuming the 787-9 isn’t further delayed, that 2016 comes around, Qantas will have been inactive in its own right across the entire reach of continental Europe since early 2013, and the actual market may have grown by around 20% if the global market forecasts of Airbus and Boeing are correct, and they are unnervingly accurate over the medium term.
This means that what Joyce said this morning in so far as returning to Europe is concerned, is Alice-in-Wonderland stuff, or to be kind, overly simplistic and improbable.
The notion that the future of Qantas in Europe depends on not being there for a prolonged period, and then being welcomed back, with a jet which it no longer actually has on order, and which many, including Emirates, regard as too small to be useful is definitely fairy tale stuff.
The-world-(so far as Europe goes)-is-moving-on-and-Qantas-is-a receding-memory.
Not only that, but as of 1 April, with impeccable timing, Qantas gives all of the one-stop or direct, even two stop flying to Europe from Perth, Adelaide and Brisbane to Emirates, and Emirates has already turned the page on its play book that says that as such markets grow it will as required replace 777-300ERs, the jet with which it scored a huge advantage over Qantas, with some of its 90 A380s, the jet with which it picks up tens of millions of dollars more in revenue per airliner per year when dealing with airports that are or will be incapable of taking any more movements, or giving them to Emirates, as the case may be as the market grows.
By the time Qantas thinks it will re-enter continental Europe it will have long ceased to be a real, as in a real Qantas jet service from all but two states of Australia.
It is worth studying the Emirates route structure. While Qantas will cease to fly between Europe and Asia on routes to or from Australia, Emirates will continue to do this, both as the chosen alliance airline for Qantas on routes between Australian cities and Bangkok, and Singapore, but from those cities and also Hong Kong, Seoul, Shanghai, Kuala Lumpur and Tokyo, and who knows what else, to its Dubai hub, from 2016 and beyond.
The marginalisation of the Qantas brand in this respect is comprehensive and devastating, even though the logic of the Qantas link with a Middle East hub carrier is undeniably correct, yet tragically late, and negotiated from a position of abject weakness rather than strength.
There are two slogans to reflect upon. They are Qantas, You’re the reason we fly Emirates and Emirates, we fly you because of Qantas.