Emirates executive says Qantas partnership is working

BERLIN Thu Mar 6, 2014 5:19am EST

Self check-in kiosks are seen at the Emirates Airlines departures terminal at Dubai International Airport, February 6, 2012. REUTERS/Jumana El Heloueh

Self check-in kiosks are seen at the Emirates Airlines departures terminal at Dubai International Airport, February 6, 2012.

Credit: Reuters/Jumana El Heloueh

BERLIN (Reuters) - Emirates airline said its alliance with Australia's Qantas (QAN.AX) was working and had helped the Gulf carrier to improve yields, after some analysts questioned the benefits of the partnership.

Qantas is reducing its workforce by 15 percent, slashing spending and selling gas-guzzling older planes after stiff competition at home and overseas pushed the Australian flag carrier deep into the red in the first half.

The loss in Qantas's international division was greater than analysts had anticipated, raising concern that the alliance it signed last year with Emirates was not yet paying off.

"For Emirates, it's working. We are satisfied with this deal," Emirates Chief Commercial Officer Thierry Antinori told reporters on the sidelines of the ITB Berlin tourism fair.

He declined to comment on the financial troubles at Qantas but said that, for Emirates, the partnership has increased the number of passengers flying business class, helping to more than offset pressure on yields in economy class as rivals increase capacity.

Under the alliance, the companies share some revenue, Qantas has moved its European operations base from Singapore to Dubai and Emirates is letting Qantas share its new terminal, which was for the exclusive use of its Airbus A380.

Antinori said Emirates had no intention of entering into a traditional network-sharing airline alliance, like rival Qatar Airways, which last year joined OneWorld. Antinori said it would require too much time and effort.

He said Emirates would suffer an unspecified dip in revenue from the temporary grounding of 20 aircraft, or around 10 percent of its fleet, for 80 days from May 1 due to the planned closure of a runway at Dubai International airport.

The grounding will include all of the airline's Airbus A340-500s, which will also be phased out entirely during the next 12 months, Antinori said. It will also include many of the company's Airbus A330s and a few of its Boeing 777s.

(Reporting by Victoria Bryan and Tim Hepher; editing by Tom Pfeiffer)

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