Qantas Airways and Emirates have entered an extensive partnership to collaborate on routes and frequent flyer benefits, shifting the Australian carrier's hub for European flights to Dubai from Singapore.
The partnership will commence in April 2013 and run for 10 years, Qantas said in a statement.
While the alliance marks a major strategic shift for both carriers, rumours of the alliance have circulated for two weeks.
"The 10-year partnership will go beyond codesharing and includes integrated network collaboration with coordinated pricing, sales and scheduling as well as a benefit-sharing model," said Qantas.
The deal stops short, however, of the pair taking equity stakes in each other. It will also see Qantas terminate its joint business with International Airlines Group, parent of British Airways and Iberia.
Qantas will launch daily A380 services from Sydney and Melbourne to London through Dubai. Combined, the two will operate 98 weekly services between Australia and Dubai. Qantas will be the only carrier other than Emirates to operate from Dubai International Airport's Terminal 3.
Qantas passengers transiting through Dubai will gain access to Emirates' destinations in Europe and Africa; Emirates passengers will gain access to Qantas's domestic network in Australia.
The carriers' frequent flyer programmes will be aligned, with passengers having access to lounges, priority check-in, priority boarding and other services offered by both airlines.
This is the most significant partnership the Qantas Group has ever formed with another airline, moving past the traditional alliance model to a new level," said Qantas Group chief executive Alan Joyce. "It will deliver benefits to all parts of the Group."
"We currently have an Asian flying schedule based on travelling via Asia to Europe," Joyce said. "But our Australian business customers want better access to Asia, and we have been looking to address this for some time."
"With European services transiting through Dubai, Qantas's Asian services will no longer be a subsidiary of the 'Kangaroo Route'," he added. "Instead they will be dedicated to connecting Australians with our region, and Asian visitors to Australia."