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Emirate’s Pain is Norwegian’s and Qantas’ Gain: Some Interesting Developments Coming Soon

Emirate’s Pain is Norwegian’s and Qantas’ Gain: Some Interesting Developments Coming Soon

Emirate's Pain is Norwegian's and Qantas' Gain: Major Announcements Put the Dubai-Based Carrier Under Even More Pressure

Things could start getting really interesting for Emirates in the next 12-months – as if the Dubai-based carrier hasn’t been on enough of a rollercoaster ride already.  In the last couple of days both Norwegian Air Shuttle and Australia’s flag carrier, Qantas have announced some big changes which could have a major impact on Emirate’s fortunes.

First, let’s focus on the news from Norwegian who are reportedly planning to use their new Boeing 737MAX aircraft for direct flights from Stockholm to Dubai.  The change is expected to take place during Norwegian’s winter schedule which operates from 01st November to 31st March.

Admittedly, Norwegian has been operating flights from Scandinavia to Dubai during the winter months since 2008.  Dubai, it seem’s, has become such a popular winter-sun destination that it has replaced the Canary Island’s of Grand Canaria and Tenerife as the top choice to escape the long, cold Scandinavian winter.

Norwegian flies direct from Oslo, Copenhagen, Helsinki and Stockholm to Dubai and it’s already carved such a large market share to have caught the attention of the president of Emirates, Tim Clark.  Earlier this year, Clark admitted that Norwegian was a concern for his airline – and a contributing factor to its financial woes.

Norwegian to start Boeing 737MAX service from Stockholm to Dubai in winter 2017

There’s plenty of demand for both airline’s to operate successful routes from Dubai to Scandinavia but the problem is Norwegian’s low prices.  In order to compete, Emirates is being forced to drop its own fares which mean lower yields and profits.  That situation is likely to get even worse with the introduction of the 737MAX.

The latest version of Boeing’s most successful aircraft ever has been designed to fly longer distances and offer exceptional efficiency.  Norwegian is set to take delivery of 6 MAX aircraft by the end of 2017 – originally intended to just operate on Europe to North America routes.

Boeing claims the 737MAX offers "exceptional performance, flexibility and efficiency, with lower per-seat costs and an extended range." Photo Credit: Norwegian
Boeing claims the 737MAX offers “exceptional performance, flexibility and efficiency, with lower per-seat costs and an extended range.” Photo Credit: Norwegian

A spokesperson explained the airline’s decision, saying: “More people are likely to travel there (Dubai) in the winter rather than North America. We will probably be announcing new routes soon.”

This move will significantly reduce Norwegian’s costs on its Stockholm – Dubai service and pile even more pressure on Emirates.  It will become the first airline in the world to operate the 737MAX from Europe into a Middle East destination – in what is normally considered to be route only suitable for widebody aircraft.  The 737MAX can accommodate 186 passengers in an all economy layout.

Meanwhile, Emirates has to fill a 777-200 aircraft with a capacity of 290 passengers – including 42 Business Class and 12 First Class seats.  Hardly a fantastic set up on a route where passengers can be notoriously frugal and dismissive of excessive luxury.

Major news from Qantas about its partnership with Emirates

And then comes the news from Qantas who are significantly rewriting their partnership with Emirates which was first established in 2013.  At the time, the partnership was a major shift for Qantas who had always flown to Europe with a stopover in Singapore.  The deal with Emirates, however, saw Qantas abandon its joint venture with British Airways move its stopover base to Dubai

Qantas will extend its partnership with Emirates but switch its stopover base from Dubai to Singapore. Photo Credit: Qantas
Qantas will extend its partnership with Emirates but switch its stopover base from Dubai to Singapore. Photo Credit: Qantas

The news, announced by Qantas’ chief executive Alan Joyce signals a new found confidence for the airline.  When it struck the deal with Emirates, the carrier had reported its first loss in a decade.  Yet just a few days ago, Qantas reported its second best year of financial results.

The changes will be made in March 2018.  Here’s a quick rundown:

  • The Sydney – Dubai – London (QF1 and QF2) route will change to Sydney – Singapore – London
  • The Melbourne – Dubai – London service will change to Melbourne – Perth – London (using the new long-range Boeing 787 Dreamliner)
  • This will allow Qantas to upgrade its Melbourne – Singapore service to an A380 aircraft.

“Our partnership has evolved to a point where Qantas no longer needs to fly its own aircraft through Dubai,” explained Joyce.

“Improvements in aircraft technology mean the Qantas network will eventually feature a handful of direct routes between Australia and Europe,” but he was quick to note that this was definitely not the end of the relationship with Emirates: “but this will never overtake the sheer number of destinations served by Emirates and that’s why Dubai will remain an important hub for our customers.”

In fact, Qantas estimates that each month over 10,000 Emirates customers transfers onto domestic and regional routes operated by Qantas.  So although the partnership is being rewritten, it’s still important for both carriers and is being extended for at least five more years.

Tim Clark, president of Emirates was also eager to point out that his airline was closely involved in the decisions made by Qantas: “Emirates has worked with Qantas on these network changes. We see an opportunity to offer customers an even stronger product proposition for travel to Dubai,” he said.

“Customers of both airlines will continue to benefit from the power of our joint network, from our respective products, and reciprocal frequent flyer benefits.”

Of course, the Qantas fleet never really added that much to the existing route network offered by Emirates – although their aircraft did take up precious space at space limited Dubai International Airport.  Emirates will no doubt make good use of the extra slots.  The problem of course, is that Emirates may well have to yet again offer discounted prices to compete with Qantas.

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