subsidiary Tigerair on Australia-New Zealand routes to
join the full-service Virgin Australia brand. In this way
it would emulate Qantas, which operates fights to New
Zealand alongside its Jetstar LCC subsidiary.
Tigerair does not have any international services since
withdrawing from the Bali, Indonesia market in February 2017. At that time, the Virgin group said it wanted to
fnd another short-haul international market for its LCC.
New Zealand would seem to be a good candidate, and
the entry of a second LCC on these routes would add yet
another intriguing dynamic.
A Chinese partner
While one of Virgin’s partnerships is winding up, another is growing in importance. China’s HNA Group
acquired a stake in Virgin in 2016, shortly before Air
New Zealand sold its own Virgin shares. HNA eventually raised its holding to almost 20% and also formed a
strategic alliance with the Australian airline.
Te HNA alliance enabled Virgin to launch a route
from Melbourne to Hong Kong in July 2017. HNA
Group member Hong Kong Airlines codeshares on the
Virgin fight, and Virgin connects to Hong Kong Airlines’
network in Hong Kong. Te relationship will expand
when Virgin introduces a route from Sydney to Hong
Kong in July. It has also recently added another HNA carrier—Hong Kong Express—as an interline partner.
Te links with the HNA airlines are a major beneft
for Virgin, making Hong Kong a gateway to mainland
China. Tis improves Virgin’s ability to tap into the rapidly growing tourist trafc from China to Australia. It
also helps Virgin ofset the advantage Qantas has in this
market, thanks to its own partnerships with China Eastern and China Southern.
While the Chinese links are important for Qantas,
its key international alliance is with Emirates. Te pair
began their relationship in 2012, and at the time Qantas
CEO Alan Joyce referred to it as “the most signifcant
partnership the Qantas Group has ever formed with another airline.” It was also an example of the old saying
that if you can’t beat them, join them, since Emirates had
become a major threat in the Australian international
Qantas has been able to connect to Emirates’ vast net-
work centered on its Dubai hub, particularly for fights
to Europe. Te pair also cooperate in other markets, in-
cluding routes between Australia and New Zealand.
Australian regulators reauthorized the Qantas-Emir-ates alliance for another fve years in March. Tis marks
the transition of the partnership into a new phase, since
the two airlines have made some signifcant tweaks to
their arrangement. In certain markets they are placing
much more reliance on the other partner’s metal.
In 2013, Qantas shifted the stopover point for its “
Kangaroo route” London fights from Singapore to Dubai.
Tis meant both partners were fying between their main
hubs in Sydney and Dubai. But from March this year,
Qantas switched its London stopover back to Singapore,
to help increase its focus on Asian markets. At the same
time, Emirates boosted its own services between Australia and Dubai. Tese moves show that the partnership
“has evolved to a point where Qantas no longer needs to
fy its own aircraft through Dubai,” Joyce said.
A similar change in approach has occurred in the
Australia-New Zealand market. Emirates had up to four
Airbus A380 fights a day from Australian cities to New
Zealand, as extensions of its Dubai-Australia fights.
However, it has now stopped three of these A380 fights
to New Zealand. Qantas has simultaneously increased
its own Australia-New Zealand fights, so the partnership retains much of its combined capacity on these
Emirates has not abandoned the New Zealand market, but has shifted its focus. It has introduced a direct
Dubai-Auckland service, and a Dubai-Bali-Auckland
fight. Like Qantas, it is prepared to let its partner carry
more of the load where it makes sense.
A signifcant feature of all of these partnerships is that
they are outside the framework of the big three global
alliances—Qantas is in oneworld, Air New Zealand is in
Star Alliance, and Virgin, Hong Kong Airlines and
Emirates are unaligned. Joyce has previously noted that
the Emirates deal takes Qantas a step beyond the traditional model of linking to airlines within the oneworld
grouping. While the global alliances will remain important to carriers like Qantas and Air New Zealand, relationships outside these structures are playing an increasing role in airline strategies.
“The time is now right for each airline to focus on its own objectives.”
Cam Wallace, Air New Zealand