As if Emirates' announcement of a US$1.6b annual profit amidst erupting volcanoes and other natural disasters was not an impressive enough figure, the carrier is tooting a future ambition to increase its weekly Australian flights from the present 63--70 come October--to over 100. It is a not-so-subtle reminder to this region's airlines to re-evaluate their networks just as they're beginning to get an initial grasp.
But that future, even if in the medium/long-term, will see not just over 100 Emirates flights but changes from Virgin Australia, the Qantas Group, and Air New Zealand.
Virgin Australia is well on its way to holding Etihad's hand and then sprinting to catch up to Emirates while the Qantas Group is still finding its lane on the running track. Air NZ, meanwhile, seems content focusing on its key market of London traffic while opening select new routes.
While much of the focus will be the destination, not to be neglected is the origin. Breaking down Emirates' seemingly incredulous figure of 100 flights a week equates to about 14 flights day. There will be jostling for which cities see additional frequencies and which new cities receive their first service. That means pressure for airlines here: Etihad and Virgin will need to increase their footprint while Qantas needs to be less Sydney-centric than ever.
Growth in intercontinental network traffic, which Emirates has made its name in and which the other carriers will be competing against, will spike next February when V(irgin) Australia is due to commence three weekly Brisbane-Abu Dhabi services as part of its alliance with Etihad.
Additional frequencies out of Brisbane or Sydney, or opening a route from Melbourne, seem to tabled given chief executive John Borghetti's announcement this morning Virgin is not looking to acquire 777 aircraft for at least two years. Virgin could consider seasonally decreasing three LAX services (under its commitment with the US DOT it can operate as few as 11 services up to six months a year to the US) in favour of Abu Dhabi, although peak travel times out of Australia for the US and Abu Dhabi/Europe would be similar.
Nearer expansion is likely, sources familiar with the situation say, to occur out of Abu Dhabi into Europe. The exact European port is not clear yet, but bets are on it being one of the same cities Jetstar and Qantas is interested in, a motley that includes Paris and Athens.
The Qantas Group has suffered heavily from delays to the Boeing 787 Dreamliner, but once the aircraft is in service the Qantas Group will begin to better compete with Emirates and others for the intercontinental traffic it has lost. Jetstar has made no secret of its plan to operate 787s from Singapore to leisure European destinations, the same strategy AirAsia X is already achieving out of Kuala Lumpur with Airbus A340s. While Jetstar will have the 787's cost advantage, AirAsia X has a lower non-aircraft cost base and will see its costs lowered once A350 XWBs come on line from 2016, meaning Jetstar has to play catch-up while also fending off AirAsia X.
Qantas meanwhile wants to return to Paris once it can serve the French city daily, and also wants to open European routes through a stopover in Shanghai, using the 787 as its equipment of choice, with chief executive Alan Joyce saying the Dreamliner "opens up that range of routes that we wouldn't see to be economical today".
An additional network boost is expected to be realised in the short-term when Air Berlin joins oneworld, but even with the carrier's addition Qantas will only be able to offer three-stop services to most European cities whereas Emirates and Virgin/Etihad will be able to offer two-stop services to almost all European cities.
Perhaps quality over quantity could work for Qantas: while Qantas may not be able to serve or have two-stop access to Minsk or Vienna like Etihad, those two cities amongst others do not see high traffic. It is possible Qantas could serve or have two-stop codeshare service to a minority of European cities that comprise the majority of traffic to/from Australia. (That exercise assumes Qantas does not make a major new partner.) The financial advantage to Qantas of it operating its own metal, be it white kangaroo or orange star, is it can keep the revenue rather than split it, as Virgin does with Etihad.
Air New Zealand
Air NZ seems to be developing a two-prong long-haul strategy of increasing its presence on London routes, its most important market, without additional aircraft by codesharing with Etihad and Virgin Atlantic.
The second strategic approach seems to be opening new routes few other carriers, including the likes of Emirates, can compete on. As our Air Transport Intelligence wire service reported last September, Air NZ is looking at becoming a hub for traffic between Asia and South America, while also launching routes to South Africa and India. Here again the 787 is key, with Rob Fyfe saying "The range of the 787s means we have some exciting decisions to make in terms of possible new future route options."