Reply To: Qantas and Finnair leaving OneWorld?

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VintageKrug
Participant

Please note it is spelled Qantas never Quantas.

It is no secret that aside from maintaining the historic link to a very important part of the world for Britain, BA is not committed, long term, to the Sydney route.

Having withdrawn from Melbourne over three years ago, BA now has fewer flights to Australia, and fewer seats available, too. It now offers only one daily 747 route, via BKK, the other being a twice daily 777 route (via SIN).

These long thin routes are very expensive to operate in terms of fuel consumed (especially using the fuel hungry 747), staffing costs (relief crews on board, downtime at each end etc.), aircraft wear and the high cost if something goes wrong away from home base.

And it can’t be that profitable, given the cheapest I can get to SYD in Club World (I class inflexible) on BA is £2700 with my 10% shareholder discount (200 shares now just £400 as the share price tanks), roughly the same cost to Bangkok and yet double the distance flown.

The Joint Services Agreement (JSA) helps ease this somewhat, but is very much in BA’s favour, given SYD is not its home base and yet it benefits from almost equal terms as QF on these routes.

BA will also not have the benefits of the A380 for quite some time, given the delay in ordering these fuel efficient birds, so it would make sense for BA to pull out from this route for a few years as the BA fleet ages and gets less competitive with the competition until the A380s arrived.

The lack of consultation over the withdrawal of BA’s shareholding in QF wrankled, so there is less close cooperation with QF than there was in the days of Rod Eddington.

Also, the oneworld agreement is up for review this year, which is probably what prompted the above speculation. Were there to be a withdrawal it would be more convenient for it to be this year, as the break clause is available.

However, given there will be hard times ahead for quality carriers like BA and QF, some sort of alliance is crucial, particularly for QF.

Perhaps we will see QF joining Star Alliance, and Singapore jettisoning its poor cousins and coming over to oneworld? Certainly QF is rightly looking more to Asia than Europe for its future strategic growth, and has been very successful at this with the JetStar brand which is not part of oneworld.

Personally I think it unlikely either will leave, and it’s certainly not as “in the bag” as is made out in the OP. But if the JSA became a none issue, and BA and AA merged there would be less strategic reason for QF to stick with oneworld.

Nonethless, it’s not beyond the bounds of reason…..yet another justification for diversifyinig your mileage portfolio to cover a range of possible changes which could happen at any time.

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