Qantas-Emirates Alliance; Bigger Things for Dubai
QUEST: When the deal was announced between Emirates and Qantas, it was a game-changer for long-haul flights, not only from Australia, but it set a template that of course everybody knew the alliances and the way global airlines operated would not be the same again. Emirates and Qantas have now completed their alliance, which has come into force.</s>QUEST: They celebrated the deal with a spectacular double flyover over the Sydney Harbor, past the Opera House, two A380s flying in formation for the first time. The deal means Emirates and Qantas will together run more than 100 flights a week between Australia and Dubai. And of course, Dubai becomes the new hub for Qantas. It will open up Emirates routes to Europe and the Middle East to Qantas passengers. I want you to join me at the CNN super screen and you will see exactly what I mean. Now, traditionally, Emirates -- sorry, Qantas from Sydney, Melbourne, would run just to a few places, their own planes, only a few places in Europe. Now, they will run their own planes to London from Melbourne and Sydney and to Frankfurt. But if I show you what this means, Qantas only used to have a few, basically, tentacles into Europe. Now, it is completely different. Look at that. The -- follow my finger. It goes from Australia up to Dubai, where they connect to Emirates, and then out to the rest of Europe. And you can tell just by looking at all the routes that are Emirates- run. Copenhagen, Moscow, St. Petersburg, Glasgow, and there's all these routes will be run by Emirates over Dubai. For Qantas, which of course had a failing Qantas International model, it was an extremely important deal. Now, Emirates deal, of course, opens up new destinations, and as the president of Emirates, Tim Clark, told us, it's more than just a simple alliance. He sat down with John Defterios in Dubai and he said the deal was, frankly, when you look at it, a bit like these two planes: like no other.</s>TIM CLARK, PRESIDENT, EMIRATES: It's the first of the type of partnership -- this type of partnership, which is to the scale that it is. We have never gone into a -- another carrier's territory, so to speak, and effectively, worked with them to handle a large proportion of their international operations as we have done with Qantas. It was a very, very neat fit. It's a game change in one because of that. Two, here we have an existing alliance player, in this case, Qantas with One World -- joining with a non-alliance affiliated airline -- of course, Emirates, and that's the way we always have been -- to produce something which is probably in many respects more meaningful and likely to produce better results for, perhaps, Qantas' bottom line than perhaps the alliance partnership would be.</s>JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: I think it's fair to say that Emirates is kind of anti-alliance, but you have this partnership. Is this a model for partnerships? It almost seems obvious to look at Far East Asia to feed through Dubai and head west.</s>CLARK: Will this be a template for the future? My own view, yes it probably will.</s>DEFTERIOS: But for Emirates?</s>CLARK: For Emirates, if we see an opportunity, and we believe there is -- these have got to be judged by both carriers as being mutually advantageous. So, if there is anything like this we look at in the future, it'll be on those grounds.</s>DEFTERIOS: Qantas has suggested this is going to add almost $100 million to their bottom line per annum, and their European bookings have gone up sixfold. What sort of calculations have you made for helping Emirates' bottom line? You've made over a half a billion dollars in your first six months?</s>CLARK: We would not have entered into it, as I said earlier, had we not done the math to suggest that we were going to improve what we do and, importantly, in our measurement of we thought Qantas would be able to gain from this -- remember, we are not, up until we got full approval from the competition authorities, particularly in Australia, we weren't even allowed to talk pricing or maths or any kind of that. But our assessment, we thought that it would add value to what they were doing. Now, if they're saying it's $100 million, OK, fine. That's up to them to say that, and I respect what they're saying. I'd like to think we could do a bit more than that eventually.</s>DEFTERIOS: Over your shoulder we have Dubai International. It had over 56 million passengers in 2012. Heathrow had 70, which puts it number one in terms of international traffic. Realistically, with this sort of partnership, could you top out and surpass Heathrow in the next two to three years?</s>CLARK: We've just gone past Paris, and that's a reality that we will eventually get to and beyond, Heathrow. It's not a design. It is what we are doing. Would Dubai become a major international hub that is the gateway to the East from the West, I think that's already happening, measurably so. So, the European markets, the African markets, the Middle East and North African markets, are now looking at Dubai as one of the primary focal points, fulcrums, for travel between the East and the West, and the North and the South. It's something that we've been saying we would do as an airline, and more recently, Dubai realized how potent that was as a sort of a push, impetus, for Dubai as a major aviation hub, not just regionally, but globally. So, you see that now.</s>DEFTERIOS: You took your 200th plane in the last week, and almost 200 on the back order. Many thought that was too ambitious and didn't know where Emirates was going.</s>CLARK: We have said we will be at 250 aircraft, we'll be 260 aircraft. They will all be wide-bodies, and we have been fairly up front with the aspirations of where we see the airline going. And it's no secret. I think it worries a few people, continues to worry the very people who challenged us on our ability to grow the airline into the markets that we said we would grow them with the aircraft that we have. But there we are. That's reality now.</s>QUEST: Tim Clark talking to John Defterios. Just out of interest, they have 31 -- Emirates has 31 A380s, going up, of course, to more than 90 -- 91 by the time they've taken their full limit onboard. Dubai is now the world's second-busiest airport for international passengers. You heard them talking about it overtaking Charles de Gaulle. For some analysis, our correspondent John Defterios told me, the Emirates deal could mean even bigger things.</s>DEFTERIOS: As you know, Emirates doesn't like to have alliances. In fact, Tim Clark was suggesting he doesn't like the big broad alliances, but he likes partnerships. You can drill down bilaterally with the different airlines right now. So, we have different strategies, one that's coming out of Abu Dhabi, you have the case with Qatar -- with Qatar Airways going into One World. And then, you see Emirates going one-to-one with this partner, with Qantas, and perhaps taking this model elsewhere. Richard, I think this is a gravitational pull from London, with Heathrow, going into Dubai from Singapore and Southeast Asia, going into Dubai, here. It moves them up to number two in January in February already in the international traffic numbers for international airports. And they think -- and Richard, they're sticking by this -- they think by 2015, they're going to surpass Heathrow with this growth of 13 percent a year in the traffic numbers that are going through Dubai already, and that is before Qantas.</s>QUEST: Tonight's Currency Conundrum: before the euro was introduced, Turkey's currency had the same name as which other European currency? Was it from Italy, Greece, or Cyprus? The answer later in the program for you. The yen's gaining 1 percent against the dollar, following the tankan survey. The euro and sterling are also rising. Those are the rates -- look at that, $1.52 on cable --</s>QUEST: -- this is the break.