Australia's Qantas, Emirates look for more operational tie-ups
DUBAI (Reuters) - Dubai's flagship carrier Emirates EMIRA.UL and Australia's Qantas Airways Ltd (QAN.AX) will look to extend their partnership to include ground services and catering, they said, a day after launching an alliance.
Their tie-up received a final sign-off from Australia's competition regulator last week but has been criticized by rival airlines for being too broad and further entrenching Qantas' dominant position in the Australian domestic market.
"Of course, there will be any number of possibilities when two companies come together," Emirates president Tim Clark told a press conference in Dubai. "As we move forward we will be looking at some of those possibilities like catering, ground handling and others."
The struggling Australian airline announced the Emirates deal in September, ending its 17-year alliance with British Airways, owned by IAG (ICAG.L).
Under its new venture, Qantas is switching its hub to Dubai from Singapore for European flights, enabling it to cut loss-making international routes and focus on its profitable domestic and budget operations. Analysts estimate the alliance could save it up to A$100 million ($104.4 million) pre-tax annually.
"We do think that this partnership will build from what we've offered today. We will explore ways of potential synergies," said Alan Joyce, Qantas chief executive.
Qantas has been stripping costs out of its business after a year troubled by a record fuel bill, rising competition and a labor union that has opposed its spending cuts.
The companies say the alliance is deeper than a straightforward codeshare - in which airlines share some flights - but stops short of a global revenue-sharing deal or equity injection from either side.
The Australian Competition and Consumer Commission granted the deal conditional approval based on the airlines maintaining at least their pre-alliance capacity on routes between Australia and New Zealand amid concerns about reduced competition.
However, it has halved the desired alliance framework from 10 years.
Emirates, which has been looking to increase its business globally amid challenges from the aggressive growth of rivals Etihad Airways and Qatar Airways, said it would consider further alliances.
"We are looking for opportunities. If we are fortunate enough to come across an airline that has the vision of Qantas then may be we would," said Clark.
Qantas, which has firm orders for 14 Boeing (BA.N) 787-8 Dreamliner aircraft earmarked for its budget arm Jetstar and options over 50 more Dreamliners, said there were no delays in the delivery of its share of the troubled aircraft.
"We have not been informed formally of any delays. We want the aircraft as soon as we can," said Joyce, of the planes which are expected to be delivered from August.
"We are told by Boeing that they intend to manufacture new batteries for our arrivals."
He also added Qantas has no immediate plans to sell its long-term leases on airport terminals in Sydney, Melbourne and elsewhere in Australia.
(Editing by John Stonestreet and Sophie Hares)
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