Emirates Executive Says Airline Is Not Interested In Qantas Investment

Airline Emirates is not interested in investing in the international operations of Qantas, the Dubai-based carrier’s chief commercial officer (CCO) said on Monday.

In the biggest restructuring step since Qantas was privatised two decades ago, the airline is hiving off its international arm from its domestic business.

The move will allow a foreign airline to take as much as a 49 per cent stake – a major change from the previous 35 per cent limit – and analysts had suggested that alliance partner Emirates could be interested.

But Emirates’ CCO Thierry Antinori said that doesn’t fit with the airline’s strategy.

“We buy planes and invest in products; we do not buy shares,” he told Reuters in an interview during an event in Frankfurt to celebrate the airline putting an A380 jumbo jet on the Dubai-Frankfurt route.

Under its partnership with Qantas, through which 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.

Emirates, though, has shied away from traditional airlines alliances One World, Star Alliance and Sky Team, saying it prefers to go it alone.

The rapid expansion of Gulf carriers such as Emirates, Qatar and Etihad has posed a particular problem for European legacy airlines. Lufthansa and Air France are both planning to expand their low-cost units to respond to competition from Gulf airlines and budget rivals.

Antinori, a former Lufthansa manager, said this kind of thinking was the wrong path to take.

“If you, as an airline, and there are unfortunately a lot of examples of this in Europe, begin to calibrate your strategy as ‘what can I do against this airline or this airline’, you will fail,” he said.

SECURITY RISKS

Antinori also said that recent suspensions of routes to places such as Arbil, Syria and Tripoli because of fighting in those countries were not good news for Emirates but that the company had been able to redeploy planes on routes such as to Casablanca and Budapest. Emirates has also suspended flights to Guinea because of the Ebola virus.

“It’s not good news, but we are able to redeploy the aircraft and to limit the damage,” he said of the suspensions.

In particular, the suspension of flights to Arbil, northern Iraq, is damaging to its cargo operations, Antinori said.

Load factors are still running above last year’s levels, he said when asked whether the route changes were having an impact on how full its planes were.

He also confirmed that Emirates is still interested in ordering more A380s from Airbus if the planemaker revamps the jumbo jet with new engines, and that the airline is in continuous discussions with Airbus.

Emirates is the world’s biggest operator of the A380, with 51 in service and another 89 on order, but Antinori said further orders would have to be for the more fuel-efficient neo version of the aircraft.

He also said Emirates will remain patient as it waits for Germany to rework the air traffic agreement that allows Emirates to fly to only to four airports in the country.

The airline is keen to fly to Berlin and Stuttgart but says it does not want to give up its services to Hamburg, Frankfurt, Munich and Duesseldorf. It had previously lobbied hard for the right to fly to more airports.

“One day it will come,” Antinori said.