Alex McWhirter examines topical business travel issues. This month: can BA and Qantas continue to compete on the Europe-Australia route?
By rejigging their schedules from the end of March, British Airways and Qantas are perhaps making a final attempt to survive on the kangaroo route connecting Europe with Down Under.
It’s sobering to realise how much these carriers’ fortunes on this route have declined over the past 40 years. A Qantas route map dated 1973 lists the airline serving six destinations in Europe – London, Amsterdam, Frankfurt, Rome, Vienna and Athens (flickr.com/photos/caribb/5408775461). In a 1988 timetable, BA proudly boasted: “With flights to Perth, Brisbane, Adelaide, Sydney, Melbourne, Christchurch and Auckland, no one serves Down Under better than we do.”
Fast forward to the present day and Qantas serves only London and Frankfurt while BA serves only one city – Sydney. This decline has occurred over a period when the market for the kangaroo route has expanded significantly. In a bid to restore their fortunes and compete with indirect airlines such as Emirates and Singapore Airlines (SIA), which do well because they can offer a choice of departure and arrival points at both ends of the route, BA and Qantas now pool revenues under a joint services agreement.
Although the combined British Airways/Qantas network covers a large number of Australasian destinations, it is weak at the European end of the route, meaning passengers from this region must travel first to London or Frankfurt to join their flights, resulting in longer and possibly more expensive journeys.
By contrast, SIA can sell one-stop services to Australia via Singapore not only to UK travellers but also to Dutch, Danish and Italian passengers. Emirates, meanwhile, can fly a Rhinelander or Venetian via Dubai to Perth or Melbourne just as easily as it can carry a Londoner, a Mancunian, a Geordie or a Glaswegian to Sydney or Brisbane.
BA and Qantas are fighting back by turning Singapore and Hong Kong into their own hubs for Australia. Qantas will fly twice daily from London Heathrow via Singapore, with one flight bound for Sydney and the other ending up in Melbourne. It will withdraw from the London-Hong Kong route altogether.
BA will scrap its existing routing to Sydney via Bangkok, meaning that from March 25, it will only operate via Singapore. This means British Airways’ schedule will be reduced from two daily flights to one. (Its London-Bangkok service will operate as a standalone route, good news for Thailand-bound passengers as seat supply was tight and fares could be on the high side, since BA gave priority to those travelling through to Sydney.)
Passengers of the two airlines bound for cities other than Sydney or Melbourne will have to get used to changing in either Hong Kong or Singapore. From here, they can make connections to other Australian cities.
Are there any downsides? The main issue is that BA/Qantas are removing more than 400 seats a day from the route. Because an airline’s capacity dictates what it can charge, it means fares might rise – although this depends on supply and demand, and not even the brightest of economists can accurately predict the outlook so far ahead.
Will the airlines succeed? The move gives them a fighting chance but, alas, the competition will not get easier. On the horizon are the emerging carriers from mainland China and India, which have begun, or plan to, serve Australia and can benefit from their geographical location to tap the route.
For example, China Southern, a Skyteam member that recently acquired the A380, now serves four cities in Australia – Sydney, Melbourne, Brisbane and Perth. China Southern is located in Guangzhou, close to Hong Kong, and when it gets its marketing act together, it can be envisaged that the carrier will become a player on the route in competition with Cathay Pacific, Hong Kong’s national airline. So British Airways and Qantas have their work cut out.
