Hub power has spoken

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The jumbo jet is among the great legacies of the 1960s to modern air travel - but so is the hub. Through hubs, the US carriers of yesteryear discovered they could vastly broaden their network simply by connecting city pairs through a single key point.

The arrival of long-range, economical types such as the Boeing 777-300ER and the Airbus A380 has set the stage for the Gulf region to become the world's ultimate hub. From this strategic point, long-haul aircraft can fly to virtually any destination, bringing together a staggering array of potential city pairs.

The alliance between Australia's Qantas Airways and Dubai's Emirates is a sharp reminder - if one were needed - of the Arabian peninsula's immense potential. Qantas has suffered losses on international routes for years, with some of the punishment likely coming from Emirates and its Gulf neighbours. The pressure eventually became too great for Qantas, hence what can be viewed as a capitulation. Although Qantas will benefit from its wide-reaching deal with Emirates, which covers everything from codesharing to air miles, the real winner here is Emirates.

Provided regulators approve the deal, in one stroke Emirates has neutralised a major competitor between Australia and Europe. At the same time, Qantas's decision to abandon Singapore in favour of Dubai for its European services gives Emirates an excellent feed for more than 70 European destinations. Operating on its own, Qantas could never have hoped to even remotely match this powerful network.

Emirates also gains access to Qantas's strong domestic network, challenging the in-roads Etihad has made via co-operation with Virgin Australia.

As with all major changes in the industry, there are losers. By abandoning Singapore, Qantas has raised questions about the city state's viability as a hub.

Customers, of course, stand to benefit. If passengers want to fly from Sydney to Rome on Qantas today, they are obliged to stop in Singapore, fly onwards to London or Frankfurt, and change aircraft for a flight to Rome. Under the new deal they stop once at Dubai's swanky Terminal 3, switch aircraft, and are on their way.

In Europe and Asia, legacy carriers will struggle to compete with the sheer convenience of one-stop travel offered by the Gulf's "big three" carriers.

Therefore, tie-ups between legacy carriers and the big three look likely to be ongoing. The Gulf is simply too well located to be ignored.

(This first appeared as the leading article in 11 September Flight International)

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