Qantas management will on February 27 announce a whopping AU$2 billion of savings in business expenses, according to reports today in the Australian media.
There is much speculation as to how these savings will be achieved. Yes, there will be job losses but Qantas is expected to rationalise its route network too.
As far as the UK is concerned, it is rumoured that Qantas will combine some London-bound flights in Dubai, although the airline has denied this.
Right now Qantas operates two daily A380 services into London Heathrow. (London is the only European point now served by Qantas since it quit Frankfurt last year). One A380 starts its journey in Melbourne, the other originates in Sydney.
Under the joint venture arrangement put in place with Emirates in 2013, both flights operate to London via Dubai instead of Singapore (the transit point in the days when Qantas had a joint venture with British Airways).
Will Qantas terminate one of these A380 flights in Dubai and transfer passengers to the other A380, which would then continue to London, which makes sense both financially?
The carrier might do this because from what I've experienced, and from what contributors to our forum have verified, although Qantas can fill two A380s between Dubai and Australia, it cannot fill two superjumbo flights on the Dubai to London sector.
Of course, much depends on the day of the week and season of travel because the kangaroo route is very seasonal.
But more Qantas passengers than expected flying Melbourne/Sydney to Dubai, or vice versa, are switching to Emirates' extensive system for their onward flights to or from the UK, Europe, Scandinavia and so on.
It means that Qantas has too many empty seats to fill both A380s on the Dubai to London leg.
Although Qantas remains one of the world's finest airlines, there is intense competition between Dubai and London. Just look at the number of flights now being operated by four different airlines, in addition to Qantas.
Qantas suffers because it doesn't have the market awareness (on this route) as do Emirates, British Airways or Virgin Atlantic. The fourth carrier, Royal Brunei, lacks market awareness too but in compensation it sells cheaper tickets.
But it's not a win-win situation. London-bound passengers flying from one of these Australian cities will not take kindly to having to switch flights in the wee hours, especially as their seat allocation may be different. And we know how fussy premium class travellers are with their seating requirements.
In a statement, Qantas said: "There are a series of unsubstantiated and unsourced rumours swirling around ahead of our half-year results, ranging from estimates on job losses to route changes.
"The facts are that Qantas has flagged the need to make tough decisions as part of strengthening our business which we will outline next Thursday.
"On the specific rumour that Qantas is looking to reduce services to London, this is inaccurate."
Alex McWhirter
