Last Thursday, Qantas announced that it was forming a close working relationship with Dubai-based Emirates in an effective admission that the airline can't compete with Emirates on price, costs, product and network presence in Europe. It recognises that Qantas had to do something radical to stop the losses on its international business. Even in Australia only 17% of international passengers use Qantas.
The other significant benefit of the Emirates alliance is that Qantas and its passengers will pay lower departure taxes to British and German government authorities.
The UK departure tax, called the air passenger duty (APD), is higher for UK flights departing for Australia that land in Singapore, Hong Kong and Bangkok than for flights that land in Dubai when passengers stay at the hub point for 24 hours or more, which is the case for a high percentage of passengers. The APD rate, quite unfairly for Qantas, is based on the distance travelled between Britain and the port where the aircraft lands. The longer the distance, the higher the rate that is paid. Qantas was paying an APD of £92 ($A142) for economy class passengers and £184 for premium economy, business and first-class passengers using the Singapore hub. By using Dubai, the rate paid by Qantas passengers falls to £65 and £130 respectively.
The variance between these rates of tax can be the difference between a profit and a loss on some international routes. The German authorities impose an air travel tax of €45 ($A55) for travel to Australia via Singapore and €25 for travel to Australia via the Middle East. Qantas will save €20 per passenger for a large percentage of passengers immediately by using Dubai as its hub rather than Singapore.
The other big problem is the steadily increasing price of fuel, a headache for airlines generally, along with the unpleasant experience of airport security deterring people from flying at all.
Some airlines are trying to recoup their extra fuel costs by adding extra fees wherever they can, and in this we can only compare and contrast Qantas with Air NZ. On a recent flight from the US to Australia we asked Qantas's (American) ground staff if we could have exit row seats for extra legroom. They replied that these normally cost $US 166 each extra, but they would try to get them for us for free - which they did. Thumbs up.
When flying from Australia to NZ with Air NZ, however, we wanted to change the date of travel. The "manage your booking" area on their website did not allow any changes so we had to ring their call centre. They said they could do it but this would involve a $US/A 100 per passenger "change fee" and a $30 per passenger "call centre fee". Thumbs down.
Which do you think we are likely to choose in future?
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