|Qantas A380 – Image courtesy QANTAS|
Earlier today, Australian national carrier Qantas announced a restructuring of its Asian network. After launching an in-depth partnership with Middle Eastern carrier Emirates and switching its Kangaroo Route services to operate via Dubai instead of Asia, Qantas announced a renewed focus on strengthening its Asian operation. The key features of the news are as follow:
- Increased capacity and better frequency/timings for services to Singapore and Hong Kong
- Improvements to the cabin, in-flight experience, and lounges – dedicated capacity increase of 10% to Hong Kong and 40% to Singapore
- Earlier arrival times into Hong Kong, Bangkok, and Singapore to increase onward connectivity
- New code share service on Melbourne-Kuala Lampur, Melbourne/Brisbane-Singapore, and Sydney-Bangkok through Emirates 5th Freedom services
- Brisbane-Hong Kong increased to daily service from 4 weekly
- Melbourne/Sydney – Hong Kong re-timed for earlier arrival, Sydney – Hong Kong loses 4 weekly frequencies, Brisbane-Hong Kong increased from 4 weekly to daily, and re-timed, Perth – Hong Kong cancelled
- Perth - Singapore reduced to daily from double daily and re-timed, Brisbane-Singapore re-timed, Sydney-Singapore gets daily service as does Melbourne-Singapore, Adelaide-Singapore is cancelled
- Sydney – Bangkok re-timed for earlier arrival.
- A new Qantas lounge in Singapore (scheduled to open 31st March), and a new First Class lounge in Hong Kong– Combined investment in these lounges was $9 million
- An expanded Asian code share network through OneWorld partners Japan Airlines, Cathay Pacific, and Malaysia Airlines
- Investigating increased destinations in Asia including Beijing, Seoul, Mumbai, Delhi, and Tokyo-Haneda using 787-9 aircraft from 2016 onwards.
- Potential refresh of the international Airbus A330 fleet with lie-flat seats in business class
The shit to focus on Asia for Qantas is a necessary change, especially as demand for both business and leisure travel has grown by leaps and bounds between rapidly developing East Asian nations and Australia. The better timings for onward connectivity also will buoy Qantas’ operations as they will allow for better integration with OneWorld partners. It should even be possible for Qantas passengers to connect through Asia onto British Airways for the Kangaroo route, though the timings are far from optimal.
But the decision to wait until 2016 for further Asian expansion is too far down the line; Beijing, Seoul, and Haneda are all viable destinations today. By 2016, Asian carriers will have had the opportunity to expand services on these routes even further, removing Qantas’ potential for expansion. Bangalore Aviation instead suggests that Qantas utilize its existing fleet of Airbus A330s to increase service to Asia, or at the very least use its fleet of 787-8s once the issues surrounding the 787s batteries are resolved.
In terms of serving Delhi and Mumbai, it would be wise to allow the market to develop and mature. None of the Indian carriers beyond the basket case national carrier Air India have any plans to serve Australia within the next 3-4 years, and Qantas can easily dominate Air India on the route. The Boeing 787-9 is the perfect aircraft for the route with enough range to make the route year round and strong unit costs to improve profitability. In terms of routes, the only city pair with enough volume to sustain nonstop service is Melbourne-Delhi, and even there the demand is primarily of the visiting family and relatives (VFR) variety, which is typically low yielding. So the profitability of Qantas services to India, even after 2016, is questionable at best.