QF/EK Tie Up To Be Announced

[DEFCON4]

In a soon to be announced tie up between EK and QF Qantas will relinquish FRA and fly to Dubai(with its own metal) effectively becoming a feeder service for EK

[wrongwayaround]

I just saw this on the news.
However I don't think an alliance will "save the ailing airline" as the article suggest.
A new management team would

[TIMA9X]

Qantas silent on talks about Emirates alliance



QANTAS and Emirates remained tight-lipped today over reports that they are talking about a possible alliance, which could see the Flying Kangaroo join the Middle Eastern network. The airlines were making no comment on the discussions, which have been proceeding intermittently after Emirates president Tim Clark last month confirmed his airline had approached Qanta (http://www.heraldsun.com.au/business/breaking-news/emirates-keen-to-work-with-qantas/story-e6frf7ko-1226393132643)s.
The tie-up would see Qantas plugging into the network of its biggest rival, but the alliance that would once have been unthinkable has become more likely as the Australian airline continues to make large international losses, predicting a $450 loss for this financial year.
Prime Minister Julia Gillard said whatever new arrangements Qantas might make, it would remain majority-Australian owned as guaranteed under the Qantas Sale Act.



"Qantas’ commercial arrangements are a matter for it,” she said on ABC radio.
Under a potential agreement, Qantas passengers would have access to the enormous Emirates worldwide network by gaining landing rights in Dubai, which could also see the Australian airline drop its remaining flight into continental Europe, to Frankfurt in return for the chance to offer passengers a vast network without having to travel via London.
Spokesmen for each of the airlines said they did not discuss commercial arrangements, but Mr Clark has made it clear Emirates is not interested in taking any ownership share in Qantas.
Qantas has been withdrawing from loss-making international routes, but an Emirates deal would likely see England as its only remaining destination in Europe.
A tie-up with Emirates would complete an expanding network of international co-operation for Qantas, which has partnership deals with American Airlines through its Dallas hub, but it is uncertain if an Emirates deal could spell the end of the Qantas-British Airways tie-up.
Qantas has been seeking to roll back loss-making routes, handing its London-bound services via Bangkok to One World network partner British Airways and co-operating with another partner, Cathay Pacific, through Hong Kong.
The need to gain far better direct access to European destinations outside London for Qantas passengers has seen the airline talking to various potential partners, with expansion of a tie-up with Malaysian stalling due to that airline’s financial woes.
The push of Qantas CEO Alan Joyce to start up a premium-quality Asian airline has also stalled, after Malaysia pulled out of talks.
Since Emirates first flew to Australia in the late 1980s it has gradually made deep inroads into the Qantas market, with the international share of passengers out of Melbourne dropping by around 18 per cent.
The last Middle Eastern airline with which Qantas had an arrangement was Etihad, but that low-level code sharing deal, which was highly conditional, broke up in 2010.
Etihad executives later struck a full deal with Virgin Australia, which now has tie-ups with Delta, Etihad, Singapore Airlines and Air New Zealand that cover more than 200 destinations globally.


somethings up

[ALAEA Fed Sec]

Has Qantas actually said anything about this or is it all just media speculation?

[piston broke again]

I don't see why EK would even consider this option. What's in it for them? I'm not a glass half empty type of guy but if I'm looking at the glass from an EK point of view, it's almost bone dry!

[rodchucker]

Is it coincidental this leaked at around the same time as the staff survey results? The Rat has form for this and seeing as there was no distraction with parliamentary processes, they probably needed to create their own diversion especially with the Jetstar safety culture issues that should have CASA's attention but probably wont.

[TIMA9X]

Has Qantas actually said anything about this or is it all just media speculation?

definitely something is going on.....


Qantas needs Emirates badly, but will this save its CEO?

Qantas needs Emirates badly, but will this save its CEO? | Plane Talking (http://blogs.crikey.com.au/planetalking/2012/07/26/qantas-needs-emirates-badly-but-will-this-save-its-ceo/)
The outing of a yet to be finalised closer commercial relationship between Qantas and Emirates in today’s AFR (http://afr.com/p/national/qantas_forges_emirates_tie_GKZJYgOs7oRkwZIgeI6VQJ) can be read as the deal that may give Qantas group CEO Alan Joyce more time to save his job, or, prove to be the final straw when it comes to badly burned investors and employees in an airline in crisis.

It appears crunch time for Q management...

[ALAEA Fed Sec]

Is it coincidental this leaked at around the same time as the staff survey results? The Rat has form for this and seeing as there was no distraction with parliamentary processes, they probably needed to create their own diversion especially with the Jetstar safety culture issues that should have CASA's attention but probably wont.


It is no coincidence.

Survey was given to Fin review. At 1430 yesterday they called Qantas for comment. Now, in the same paper they get another reporter to talk of this deal that is in the making to grab the headline but you will note that Qantas haven't really made any comments about it.

I reckon a deal with Emirates would be great. They fly North/West of Dubai, we do all the Australian legs. It either won't happen because it is horsesh!t or they will hand our rights to Europe over and get nothing in return.

[Al E. Vator]

What a shame to see this demise - 1973 Routemap:
Qantas Route Map 1973 | Flickr - Photo Sharing! (http://www.flickr.com/photos/caribb/5408775461/in/set-72157625764833635/lightbox/)

[moa999]

But how many jets and pax numbers in 1973 versus today.

[600ft-lb]

Australia is a huge market for in and outbound tourism, I'm sure the benefits are mutual for EK. A massive domestic feeder network, former Oneworld passegners directed via Dubai and onwards. A kick in the pants for SQ and CX it would be.

[wrongwayaround]

A.e.V
I guess Adelaide wasn't founded then =] ?

[teresa green]

Well that will make for interesting viewing. Ek, will want big bucks for any dollar they put in, and the Australian attitude of "get stuffed we will do it our way" should make for confortable seat and popcorn time. If it happens get ready to fly your asses off lads.

[grrowler]

Considering AJ appears to be copying everything JB is doing at Virgin (no Allan, no one actually thinks you come up with any good ideas), I would suggest that a tie up with EK would pretty much remove the need for any QF metal to fly west. QF could shrink international and just fly the Pacific, along with a few token flights here and there. Grab whatever commission (or whatever they get in a tie up) EK throws your way and focus on domestic. I wonder what wonderful things AJ can come up with when he shifts his focus onto domestic...:eek:

[rodchucker]

Domestic strategy is obvious...take out Tiger, because thats about all they are capable of.Sad but true, they have no idea how to actually grow or be innovative. Joining EK (if it happens) is one step below gifting routes to a friend (BA), now they are giving them to a fierce competitor.

[Bagus]

Tie up with emirates will secure him a job there,

[Ka.Boom]

QF share price jumped 7% to a $1.06

[ozbiggles]

I don't think Emirates are dumb enough to employ Joyce.
He is good business for them where he is. It will be a real cheap deal for them.

[404 Titan]

ampclamp

Being openly gay and working in the Middle East are about as compatible as a ham, cheese and tomato toasted sandwich are to a devout Muslim.

[ampclamp]

From the ASX.
QANTAS RESPONSE TO MEDIA REPORTS
SYDNEY, 26 July 2012: Qantas today confirmed it is in discussions with a number of airlines about
potential alliances.
These airlines include Emirates, among others.
Strengthening alliance partnerships is one of the four pillars of the Qantas Group's five-year strategy,
announced in August 2011.
At any one time Qantas may be in contact with a wide range of companies about potential
commercial cooperation.
Qantas' policy is not to comment on the nature or status of these discussions. Should Qantas have
a material announcement to make, it would be disclosed to the market in the normal way at the
appropriate time.

[teresa green]

Qantas is Gay? Are we talking about Elaine or QF?:confused:

[404 Titan]

teresa green

Have a read of a few posts before mine. It will become clear from those who I am referring to.

[Bypass ratio]

I'll tell you in two words why Emirates wants Qantas..........The Pacific.

[teresa green]

Titan, pardon my tardiness, I just got my power bill with a 19.5% increase in it. The shock you understand.:{

[404 Titan]

teresa green

I hear ya. I just got a letter from AGL advising how much my power bills will be going up. If I repeat the words I blurted out reading this letter on this forum I would be banned for life.:mad::ugh::mad::ugh::mad:

[skype]

My last trip was with Americain FO he remarked that last month on the direct BNE - DXB 27th June he had AJ and CEO of Jetstar ( I don't know his name )

Capt was Aussie and confirmed they were said CEOs of the White Rat and Pornstar Airlines.

So I think there is some truth in this story...... Will see in few coming months

[DrPepz]

Why is it every time the QF share price plunges or goes near $1, there miraculously is a "leak" that QF is announcing a tie-up with EK or QR? Something fishy here?

[SOPS]

Funny DrPepz, I was just thinking the very same thing.

[ohallen]

You betcha it is fishy, there was nothing specific about the announcement or even the slightest information that would support any change in the business.

Its about time ASIC starting looking at these mysterious leaks and their effect on the share price and there is a well established pattern emerging.

If anything the damn share price should have gone down with the results of the employee survey which was released, but no the exact opposite with nothing specific.Looks like the nod and the wink are worth more than fact here.

[virginexcess]

How clever is the Qantas board.

They ended up with the best of both worlds.

AJ's belligerent management style, kicking union heads and taking names, along with Borghetti's vision, without having to pay JB any money. The only drawback is that AJ has to wait for JB to show him what his next move needs to be before he can start working on it.

All this would make perfect sense if Joyce was the lowest paid airline executive in the world, not the highest.

[ALAEA Fed Sec]

Every time they leak a pending announcement that proves to be false, the share price settles lower than where it started. But at least the public didn't hear too much about the pesky employee survey.

Short term gain, long term pain.

[Worrals in the wilds]

Short term gain, long term pain.
That's assuming they see a low share price as a bad thing. :suspect::}

[neville_nobody]

Its about time ASIC starting looking at these mysterious leaks and their effect on the share price and there is a well established pattern emerging.

Unfortunately QF are virtually untouchable it would appear when it comes to Government Regulation of any kind

[hotnhigh]

Interesting to see the share price bounce and the so called market experts commentary on the move in the press today.

And the benefit to qantas and its shareholders?

At least the remaining loyal qf passengers might fly one more time with qf in a westerly direction before working out they could take any of the multiple daily flights from any australian port with ek.

Rapidly increasing the demise of qantas until Alan and Leigh decide to close the door, as its cheaper and easier to let emirates run the pacific by themselves,

Shrinking to grow.......Nice one Alan.

[argusmoon]

Why didnt QF fly to DXB with its own metal?
It could've positioned several A330s in DXB and run services between there and European ports.
I remember a discussion on PPrune about this awhile ago.None of the naysayers really offered a satisfactory reason as to why not

[Mud Skipper]

argusmoon.

What is the real advantage of going by DXB, it is roughly 230nm further than SYD LHR via SIN and 330nm further than via HKG.

For that matter, MEL to LHR via DXB is 150nm further than via SIN and 70nm more than via HKG.

Incredibly many people in the press and public still think of the world as flat and believe we are an end of the line carrier rather than a feeder to our own domestic network, something a middle eastern carrier does not have.

[Wizofoz]

something a middle eastern carrier does not have.

...yet.....

[argusmoon]

Thats all fine if LHR is your destination.I've never been fond of flying backwards to get to Europe.
DXB to ATH FCO,IST and just about every other place in Europe are far more accessible from DXB than LHR.
LHR is like LAX...a bloody nightmare.Being able to avoid LHR as a transit is better than being cured of an ingrown toe nail.
When you are flying at mach .85 150nm is immaterial compared to transitting LHR and re checking in to go to CDG
SYD/DXB/CDG is no brainer

[blow.n.gasket]

Serious question. Has any senior Qantas manager or group of Qantas management had shares vest or due to vest soon?

[Mud Skipper]

argusmoon,

I appreciate that but you could equally hub out of Singapore, Hong Kong or Bangkok... oh wait a moment we use to do that and the best brains in the company decided it was better just to code share.

Soon there will be nothing left the way we are heading.:}

[Romulus]

I appreciate that but you could equally hub out of Singapore, Hong Kong or Bangkok... oh wait a moment we use to do that and the best brains in the company decided it was better just to code share.

Hubbing out of HK was great, allowed for all sorts of shopping to be done on a stopover etc etc etc. Not so easy these days.

As for codeshare, I get the crew savings in terms of distances and sick cover etc but do you really have to share with BA? They always seem so miserable whenever I fly with them, to the point I actively avoid BA if at all possible.

[Worrals in the wilds]

Hubbing out of HK was great, allowed for all sorts of shopping to be done on a stopover etc etc etc. Not so easy these days.

As for codeshare, I get the crew savings in terms of distances and sick cover etc but do you really have to share with BA? They always seem so miserable whenever I fly with them, to the point I actively avoid BA if at all possible. Yeah baby. :ok:
I adore Hong Kong and have tried hubbing it twice with Qantas. The first time we got dumped onto a BA Jumbosaurus from HKG to LHR with dodgy aircon and several non-working toilets. It was full to the extent that there seemed to be passengers allocated to overhead locker bins. The crew did try their best but it was an endurance marathon for everyone concerned.

The second trip was a QF codeshare with CX who were good when we finally bullied our way onto the aircraft, but the transfer process was like something out of a Medicare office. Long queue, shut counter, passenger faces filled with hopelessness...Chekhov could have written a play about it. :rolleyes:

On both occasions the Qantas legs were reasonably good (despite the usual confusion about Qantas' Higgs Bosun-like special meals; they theoretically exist, but have not yet been observed by reliable witnesses :ugh:) but the hassles were not worth the effort. It's easier (and often cheaper) to fly with someone else, and that's the whole Qantas problem.

[Ken Borough]

On what basis would EK be granted the rights to operate on the Pacific? The Aust Govt holds the key,and I'm fairly sure that Virgin would hardly give such a proposal their tick of approval.

[1a sound asleep]

So what's in it for EK? Am I the only person a bit suspicious about a rumour that makes little sense?

[Ka.Boom]

Who said anything about giving EK rights to the Pacific ?.Access as far as a link with Qantas...yes...Rights ...no

[Romulus]

So what's in it for EK? Am I the only person a bit suspicious about a rumour that makes little sense?

You mean other than an alignment with a dominant domestic partner of, in global terms, high spending individuals who are keen to travel internationally in large part due to a 50% appreciation in the global value of their currency?

[Ollie Onion]

Yep, my bet would be that the tie up would mean Emirates has a ready made domestic feeder in Australia and New Zealand. Both these populations spend a lot of money on international travel and are also massive tourist markets. Unlike most other countries (UK etc.) Emirates is very limited in which airports it can fly into. In the UK, Emirates flys from LHR, LGW, BHX, NCL, MAN, EDI, GLW etc.. they don't need the feeder network as they fly from the regions.

This isn't possible in Australasia due to our poor regional facilities. in return for giving Qantas international a few concessions on a few routes they will gain an entire domestic network. Trust me, if this does happen there must be a big up side for Emirates as they are not renound for doing anything out of the goodness of their hearts.

[mcgrath50]

The thing that doesn't add up for me is that one of Emirates' core strategy is that they do it all by themselves, without alliances. If they were to break this, is the Australian domestic market really the gold mine they would first pounce to?

I'm still not convinced EK would be interested unless QF gives them something in the deal as a big sweetener!

[packrat]

Emirates has the domestic market it has long craved:Australia and the Qantas domestic Network.More and more of QFs international routes will be ceded to Jeststar.A code share will be developed between Emirates and Jetstar.Once financial consolidation is in place Jetstar will be repainted in Red and White.Qantas international reborn,massive ad campaign and all with a 20%lower cost base

[catch18]

I don't think this will happen - what about one world and also the recent deal with Qatar.

Does EK have deals with anyone?

[ejectx3]

Code share between emirates and one star? You mean buy emirates ticket : get Jetstar ?

Punters would love that one

[Kiwiconehead]

Emirates has the domestic market it has long craved:Australia and the Qantas domestic Network.

Yep, my bet would be that the tie up would mean Emirates has a ready made domestic feeder in Australia and New Zealand. Both these populations spend a lot of money on international travel and are also massive tourist markets.

There are 22 million people in Australia, with EK flying to PER, ADL, MEL, SYD, BNE gives them access to 14million of them.

Is it worth it to EK to get access to the other 8 million.

[SOPS]

EK would not tolerate thier ticket holders ending up on a Jetstar flight, in my opinion at least. It would go against everything they market and thier brand image. And they are very very protective of the brand.

[ferris]

I think you are all looking at this backwards.

As pointed out, EK flies everywhere already. It won't be people buying tickets on Emirates and ending up on a Jetstar flight- it will be people buying tickets on Qantas and ending up on an Emirates flight.

Isn't this the management dream? They get to lower their cost base (down to EK's) by not having an airline at all. They just sell the tickets, and EK provides the actual airline.

[virginexcess]

I can't wait to see AJ try and throw his weight around in those rarified aviation circles. TC will eat him for breakfast.

[Romulus]

EK would not tolerate thier ticket holders ending up on a Jetstar flight, in my opinion at least. It would go against everything they market and thier brand image. And they are very very protective of the brand.

Absolutely.

But think about this - QF domestic fliers hate Jetstar, that's why they fly QF international expecting top shelf service. Rightly or wrongly QF International is reportedly not making cash so the QF board engages Emirates to deploy their brand and associated reputation for ultra top end levels of quality and service which gives the QF feeder network from domestic a truly top end international product to feed into.

QF gets cheaper international links, EK gets feed in from QF domestic and everyone wins.

Unless you happen to work for QF International.

[Romulus]

Isn't this the management dream? They get to lower their cost base (down to EK's) by not having an airline at all. They just sell the tickets, and EK provides the actual airline.

Bingo.

Who has the reputation for being the current global leader in top shelf international flying?

[Romulus]

I can't wait to see AJ try and throw his weight around in those rarified aviation circles. TC will eat him for breakfast.

Why would AJ throw his weight around? EK represents a major problem solved for QF, TC wins by getting bigger loads on his Aus runs so he wins as well.

Punters get to fly Emirates and QF domestic so they win.

Bad luck if you happen to be QF International employee though.

You're going to need to get to EK standards very quickly or the press release will soon be "due to customers preference clearly being for Emirates flights Qantas have decided to meet this demand by engaging more closely with their partner, Emirates, and have decided that in order to meet customer demand all Qantas International flights will be provided by Emirates".

[Captain Gidday]

Why would I come down to Emirates standards?

[Romulus]

Why would I come down to Emirates standards?

As opposed to?

If you're referring to Qantas then you might wish to consider that de nile isn't just a river in Egypt. :}

[Crossing Guard]

With no mainline paying the Jetstar costs will it last long?

[Metro man]

Emirates are okay but not quite up to SQ/CX/QR standards. Ten abreast in economy in their B777s is a bit tight.

I'll happily fly EK but they're not my number one choice.

[Jackneville]

What's in it for EK ? How about a bunch of precious EGLL slots.........

[Killer Loop]

Or perhaps access to the very valuable Qantas Frequent Flyer Programme?

[virginexcess]

Why would AJ throw his weight around?

Yeah, I don't know either, it's just that he seems to make a habit of telling heads of other airlines how things are going to be. Pretty much exclusively to his own detriment.

Maybe he's learnt his lesson and has gone cap in hand to TC to ask for help..........but i don't think so.

Keep in mind EK don't need Qantas. Sure a Qantas domestic feed will help a little bit, but really it is only a regional feed because EK already fly to every major city in Australia, so EK won't get the boost from a domestic alliance in the same manner EY did with Virgin. But you can bet your @ss Qantas needs EK because they currently have no international network (to speak of) and they will benefit massively from the EK feed as inbound tourists hop between states.

Further more, the Australian connection really is such a small part of EK's network. So this deal is a game changer for Qantas and a minor improvement for EK.

Again, given AJ's historical tendency to arrogance, it will be interesting to see whether he can hold his tongue when EK start dictating terms. And believe me EK will start dictating terms. They now call the shots at Boeing and Airbus in regard to widebody design, so pulling AJ into line will be a relative walk in the park.

[The The]

Further more, the Australian connection really is such a small part of EK's network.

Emirates recently stated:

''Strategically it is a very important market for Emirates. [Australia] is now Emirates' second or third [highest] revenue-producing country,''

Emirates will soon operate 84 flights a week to Australia, so I wouldn't downplay the benefits of a domestic tie-up for both EK and QF. It's not just regional feed, but links capital cities so you can say fly into Perth on Emirates, then QF domestic to depart Sydney. It gives EK a much stronger Australian network with multiples of new options for travelers. With close domestic connections, it will show for example that EK can get you from ADL to DXB 5 times a day.

The QF international network is so small now anyway that an EK tie up may not make a difference at all , it will never expand regardless. Perhaps a shift to more US destinations would be possible.

I do agree QF management have a very long history of pi$$ing off other airlines with their arrogance and with the current management seemingly only able to kick own goals, there is a good chance they will completely stuff this one.

[virginexcess]

The real advantage to EK, as it is with EY, is that both airlines can increase capacity into and out of australia without having to fight for more access. This is clearly a bigger benefit to EY who have far less services to australia, but nevertheless that and the access to the pacific are the real reasons behind both the Virgin and Qantas alliances.

[StallBoy]

If this is the best AJ can do then it's sad times ahead for QANTAS. What was once one of the best airlines in the world joining up with possibly the worst airline (sardine can) in the world, how far can this Irish Alien go ??????

[Ka.Boom]

Home to Ireland springs to mind

[SOPS]

EK=sardine can? Um I dont think so.........:=

[poacher2gamekeeper]

Spike TV Train Wrecks - YouTube

This looks like a train wreck to me!

[Romulus]

If this is the best AJ can do then it's sad times ahead for QANTAS. What was once one of the best airlines in the world joining up with possibly the worst airline (sardine can) in the world, how far can this Irish Alien go ??????

And many complain Joyce is arrogant!

[Wonderworld]

Why would he go "home" to Ireland when he has an Aussie passport? I'm not a fan either but these "go home" statements are ridiculous.

[600ft-lb]

Maybe you're all just looking at it wrong.

Western countries tend to think the rest of the world plays by their rules.

How do we as a western country reconcile that this is probably more to do with the vast majority of hub traffic no longer hubbing through HKG, SIN, KUL etc, but hubbing through the UAE.

As in, this goes beyond simple business economics and more to do with nation state importance. Taking the airlines out of the equation, there's more in it for the UAE then there is for Australia if you look at it that way.

[donpizmeov]

Virgin-Etihad

Virgin Australia Holdings Ltd. (VAH) (http://www.bloomberg.com/quote/VAH:AU) has increased competition for Qantas on Europe routes through a tie-up with part-owner Etihad Airways PJSC. The deal lets Virgin sell tickets to about 30 European destinations, with only one stop in Abu Dhabi (http://topics.bloomberg.com/abu-dhabi/), Dubai’s neighboring emirate.
Qantas could potentially add more than 40 one-stop destinations through an Emirates deal, based on route maps on the airlines’ websites. British Airways is the carrier’s main European partner at present.
The airline could also save as much as A$600 million of capital spending (http://topics.bloomberg.com/capital-spending/) over the next five to six years by dropping the Frankfurt route and tying up with Emirates, Russell Shaw (http://topics.bloomberg.com/russell-shaw/), an analyst at Macquarie Group Ltd. in Sydney, said by phone. The main saving would be avoiding the need to replace three Boeing Co. 747 aircraft, he said.
“There’s also an opportunity for Qantas to win a little bit of market share back,” he said.



Doesn't look like the Domestic bit has much to do with this deal. Looks more like downsizing the International Fleet/Flying. Not good for pilot careers in Australia.
I wish someone who knows about growing business, rather than cost cutting was allowed some time at the helm of QF.
I hope this turns out to be only a rumour.


The Don

[Sunfish]

I call it eating the seed corn. This is what starving peasants sometimes did in winter - leaving them nothing to plant in spring and certain death.

Throw International to the wolves.

Watch Virgin slice into their domestic market share.

Leaving them with the bastard child Jetstar - which no one wants to fly.

Joyce and the Board are clutching at straws.

....at least until that takeover bid arrives, the airline goes private and voila! It is suddenly profitable again!

[ampclamp]

From the news wires

DOHA (Zawya Dow Jones)--Dubai-based Emirates Airline is talks with Australia's Qantas Airways Ltd. (QAN.AU) about a code-sharing agreement and a deal could be completed within two to three months, a person familiar with the matter said Thursday.
Any tie-up would give Emirates access to Australia's lucrative domestic market, while Qantas' struggling long haul operations could receive a boost, the person, who asked not to be named, told Zawya Dow Jones.
Qantas Airways shares climbed 10% Thursday after it revealed it's working on a potential partnership with the world's largest international passenger carrier that could see it route European flights through Dubai instead of Singapore.
Confirmation of the talks comes just a week after the Australian government gave the green light to Emirates' Abu Dhabi rival Etihad Airways to lift its stake in Qantas competitor Virgin Australia (VAH.AU) to 10%. Emirates favors organic growth, while Etihad has recently bought a string of minority stakes in carriers across the world, strategic alliances that it hopes will funnel traffic through its Middle East hub.
Speculation has been mounting for weeks that Qantas and Emirates are close to signing some form of commercial partnership.
Any deal with Emirates would benefit Qantas by allowing it to place passengers flying to Europe on Emirates flights instead of having to pay for flying them on its own aircraft. This could involve the airline flying aircraft to Dubai, where passengers would then transfer to an Emirates flight to travel on to Europe.
"You could go anywhere to Australia on an Emirates ticket and Dubai would provide Qantas with a good base to serve people internationally," the person familiar with the talks said.
Codeshare deals are structured differently. Most allow carriers to sell tickets on each other's flights and share the revenue, though this partnership could see the airlines sell a quota of seats for a certain price on flights, the person said, adding the agreement would unlikely involve revenue-sharing. There could also be agreements on ticket pricing.
Emirates currently code-shares with Air Malta, Air Mauritius, Japan Airlines, Jet Airways, JetBlue, Korean Air, Oman Air, Philippine Airlines, and South African Airways.

[TheWholeEnchilada]

I've been watching the QAN short interest (http://www.asx.com.au/data/shortsell.txt) for a while. Interestingly, it's declined from 0.25% after the selldown from $1.50 to its current level of ~0.04%. If we assume that the shorts are the smart money, they have been saying for a month or so that the risk-reward is skewed to a higher, rather than lower price for QAN. Do they know something the market generally doesn't? I wonder who has had a whiff of this deal, and when did they know?

[ampclamp]

I think those who go short (in big numbers) use large amounts of technical analysis to form their trading levels and strategies. For most it is numbers on a graph, nothing more.

[TheWholeEnchilada]

ampclamp, sure there are technical & fundamental traders who use this publicly available data. Fundamental traders would possibly construct their own data too (ratio's & metrics between airlines, oil price and modelling the economy etc). However, the smart money has other information not available to everyone, lets call them "information" traders, they specialise in knowing who & what to know & front-run the public information flow. You may want to read up on Raj Rajaratnam & his Galleon Fund & insider "expert networks (http://www.guardian.co.uk/business/2011/mar/04/sec-expert-networks-hedge-funds)". Where ever the ability to profit from this information asymmetry exists, it will be used, hence the "smart money" gives us hints at their view, and one of these metrics is short interest.

Its not nearly as easy to go short as to go long for the retail investor (try finding a retail short selling broker, google search (https://www.google.com/search?q=australia+short+sell+brokers&ie=utf-8)) unless you use some sort of leveraged instrument (CFD's & options). Institutions and Hedge fund have no trouble borrowing stock to short, this is routine business for them.

Some of the reported shorts would be hedges for options, warrants & CFD market makers. However, I believe it provides an excellent view how insiders consider the likely risk/reward skew in prices because retail can't do it easily, ie only connected bigger traders will use shorts routinely. It is still possible to do retail, just not easy.

[SOPS]

Here is a thought. Rumours of EK/QF tie up. Rumours of QF stopping all international services (or what are lerft of them) out of Perth and Adelaide.

Could the two be related?

[TIMA9X]

Qantas-"The Flying Headline" was back on the front page

HDt1a7o5oxI

[Ultergra]

Perhaps the best written article concerning Qantas, Australia and Middle Eastern Airlines.. Taken from gulfnews.com


Australia looms large in Gulf aviation
Emirates and Etihad eye expansion Down Under

Yet again, Australia looms large in Gulf aviation. First, Etihad Airways gets approval from Australia’s Foreign Investment Review Board to increase its stake in Virgin Australia to 10 per cent. Then Qantas’ share price goes up by that percentage when it announces that it is in serious discussion about some sort of cooperation with Emirates.
From the perspective of the Gulf carriers, the target is access to Australia’s domestic market. As I have previously mentioned, the arcane rules that govern air transport rule out the normal commercial options for accessing a market. So each of the UAE’s big two have taken their own road to get to market.
Australia is, in aviation terms, a special case. It is as if it was designed to be the world’s aviation test market. It is geographically huge and populated by some of the most industrious, peripatetic people on earth. Each weekend, for example, half the country seems to in airports following their football team to away fixtures. Sydney-Melbourne is one of the five busiest sectors in the world.
The mining boom means that on Monday mornings too, miners working on ‘fly-in; fly-out’ contracts are reporting for duty. That has put huge pressure on the existing infrastructure, particularly Perth and Brisbane airports. It has also meant that the domestic Australian market has been very strong. The strength of the Aussie dollar means Australians are taking overseas holidays in big numbers, making the international market strong too.


Beyond Australia is the trans-Tasman market and then going further east, there are the trans-Pacific routes to the USA and to Latin America to consider. Historically, trans-Pacific routes have been very profitable for Qantas. The Tasman is busy, but less profitable.

Emirates and Etihad need to access those keen-to-fly Australian passengers to feed into their network. Etihad’s strategy is to invest in like-minded carriers in certain markets — Aer Lingus in Ireland, airBerlin in Germany and Virgin Australia in Australia — and build feed from that relationship.
Emirates, to date, has not done that and has not done much in the way of traditional airline cooperation with other carriers generally. Its strategy has been to fly from its huge hub with new generation equipment to under-served markets that formerly required passengers to make a transfer to access. Geneva, Manchester and Lyon are examples of this; large cities on the ‘spoke’ of most airline networks. They have not needed to code-share to access these markets.
Code-sharing is an agreement between airlines to sell the flight using the airline codes of each airline, for each airline to sell the route as one it operates and then for the carriers to agree that only one of them will actually operate the flight on a particular day. It requires that each carrier be entitled to operate that route.
Pricing on the seats each carrier sells can be agreed individually, so it is not of itself anti-competitive to enter a code-share agreement. But it does have the effect of limiting, and sometimes reducing, the number of seats in the market. Reducing supply will usually work to increase prices.
Australia is different. Even if you fly to the big four — Sydney, Melbourne, Brisbane and Perth — there are still many passengers that need to fly on to other locations, or who commence their journey in other locations. It is those passengers that Emirates and Etihad are looking to bring onto their network.
For Qantas, an arrangement with Emirates will be interesting, to say the least. If it means that Qantas flies its passengers to Dubai, to have them transfer onto the Emirates’ European destinations, that will be good for Qantas’ passengers, giving them a vast choice of non-stop destinations, while avoiding a Heathrow transfer. But it will be a disaster for Qantas’ alliance partners, particularly British Airways, who will miss out on this traffic.
It will also signal a near final, fatal, retreat by Qantas from Europe. That will be a sad day for Australian aviation, but a lesson in airline management the world should learn from.

Emirates and Etihad shine out, like beacons in a blackout, to say that cost cutting and downsizing do not have to be the one and only way to build a successful airline. You need the right equipment, investment in your product, an understanding of your customers and their needs and vision.




In a nutshell, that's what we're all facing. Not just a tie up, but then a push into our domestic market.

[ejectx3]

Dear Alan,

"Emirates and Etihad shine out, like beacons in a blackout, to say that cost cutting and downsizing do not have to be the one and only way to build a successful airline. You need the right equipment, investment in your product, an understanding of your customers and their needs and vision."

[maggotdriver]

Cheap access to debt, no or virtually no tax on any part of the business, foreign governments that allow unfettered access to carriage of people, no or minimal requirement for ROCE due to a fundamental difference in the key driver of the company, no requirement to follow UN human rights requirements with respect to collective negotiation, marginal compliance with ICAO flight and duty requirements, no independent umpire who can look at the books for predatory pricing or uncompetitive behaviour, and be in a fortunate geographical position, but besides that they're standouts!

Don't worry, I still think QF management are numpties, but really....:ugh:

[ohallen]

An intriguing statement by EK in the press today that any tie up will take 6 months. I know these things take time but there is obviously still no deal so the leak is appalling. Wonder if it props up the share price for that six months. Typically deal would be announced saying details to follow, but not so here so we are all left to hanging by a thread (pun intended).

[Easy Ryder]

Emirates says Qantas talks do not include revenue sharing | Reuters (http://uk.reuters.com/article/2012/08/01/us-emirates-qantas-idUKBRE8700E020120801)

[halas]

I'll agree to the location bit.

halas

[PPRuNeUser0198]

Let's not forget that Etihad have not turned a profit in six years - but that's okay. They're not accountable to anyone...:rolleyes:

[piston broke again]

I think ull find Etihad turned a profit last year - back in your box T-V

[ernestkgann]

11 million? Maggot is generally on the money in my opinion.

[dragon man]

Rumour has it that Emirates dont want a code share with Jetstar only Qantas, but that leaves a gap in destinations.

[ohallen]

And who in their right mind would want to code share anything of the ilk of Jetstar, so that would hardly be a surprise? Its only the idiots at Qantas that have this dream of being able to spread the costs across as many business entities as they can to make the place look good.

[Ultergra]

Here is a thought,

Qantas can't set up all these foreign bases right..

Jetstar can.

Qantas "buy out" Jetstar.. Badabing, QF Japan, QF Asia, QF HK...

[Ultergra]

And then all you need is a small QF Int. in Australia, say 16 A380's or so who fly pax to the hubs, and the new QF pilots fly them from there.. It makes sense on a strategic level of where the company, as a group, are at and where they are heading..

[piston broke again]

Yep. And it goes some way to explaining the red 787 tails in the US whilst no training has been undertaken at QF.

When was the last time you saw a jetstar ad on tv?

[OneDotLow]

And it goes some way to explaining the red 787 tails in the US whilst no training has been undertaken at QF

And the evidence of this is where? The only red tailed 787s that I have seen any evidence of are these ones ... Air India 787 (http://www.nycaviation.com/2012/03/plane-of-note-first-boeing-787-dreamliner-in-air-india-livery-debuts-in-new-delhi/)

[Normasars]

Was at the Everett Field just last month and there definitely AINT any B787s with a red and white tail on 'em. Or an Orange start on 'em either for that matter!

You blokes are jumping at shadows.

[Normasars]

Was at the Everett Field just last month and there definitely AINT any B787s with a red and white tail on 'em. Or an Orange star on 'em either for that matter!

You blokes are jumping at shadows.

[Mstr Caution]

Air India pre paint job could easily be confused for a QF tail

First 787 built in SC takes maiden flight - San Antonio Express-News (http://www.mysanantonio.com/business/article/First-787-built-in-SC-takes-maiden-flight-3578721.php)

[TIMA9X]

Emirates shows it hand with Phuket flights | Plane Talking (http://blogs.crikey.com.au/planetalking/2012/08/03/emirates-shows-its-hand-with-phuket-flights/)
Emirates shows its hand with Phuket flights


But it helps explain why Emirates is disinterested in having anything to do with Qantas subsidiary Jetstar, in that it is firmly of the view that long haul flight needs to be pitched to all consumer tastes, and not limit the selling opportunities to low fare customers as seen on the associated 737 operation, FlyDubai which is rapidly expanding into a wide range of small city shorter haul routes within one to four hours flight time from its UAE hub.


The Phuket move comes a few days after Emirates took control of the Qantas-Emirate deal discussions by nominating the time frame, six months, and the nature of the deal it would accept, as a non-revenue sharing code share.
Those constraints may be seen as leaving Qantas management short of a speculative headline to trot out at its 23 August full year results, as a sort of son-of-Red-Q which was the nonsense used to stimulate excitement in analyst land nearly a year ago today.
A lot of mixed messages emerging on this tie up situation.... I think Ben makes a good point re the J* element...