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Qantas Raises Stakes In Transpacific Competition

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I have reproduced this article as I'm sure the interest level will be high. Unfortunately the full article can only be viewed with an AW&ST subscription.


Qantas Raises Stakes In Transpacific Competition

Aviation Week & Space Technology Oct 06, 2014 , p. 18
Adrian Schofield
Transpacific Tactics



When a Qantas Airbus A380 landed at Dallas/Fort Worth International Airport (DFW) for the first time on Sept. 29, it marked the latest escalation in the hotly contested market between North America and Australasia.

Qantas is the biggest player on these routes, but it has plenty of company. United Airlines, Delta Air Lines, Air Canada, Virgin Australia and Air New Zealand all have direct flights between Australasia and the North American mainland, while others have attractive one-stop options, such as Hawaiian Airlines. A series of competitive moves is causing substantial changes in this market.

Transpacific routes have been a welcome bright spot for Qantas in a loss-making international business, and this is reflected in the additional resources it is placing on North American services.

Replacing Boeing 747-400s with A380s on the Sydney-DFW route—flying six days a week instead of seven—will lift capacity by 10%. More important, it will eliminate the need for a stop in Brisbane on the return flight due to prevailing winds.

At 13,805 km (8,600 mi.), Sydney-DFW is believed to be the longest scheduled passenger flight in the world, ahead of Delta’s Johannesburg-Atlanta flight and Emirates’ Dubai-Los Angeles service. While Qantas operated the first A380 flight at DFW, Emirates introduced the aircraft on its Dubai-DFW route on Oct. 1.

Qantas is also adding frequencies—year-round and seasonal—to its main West Coast gateway at Los Angeles, which it serves from three Australian cities. The carrier continues to New York as an onward flight from its Sydney-Los Angeles route.

Canada provides another focus for Qantas. The carrier signed a codeshare deal with Canadian carrier WestJet last month that will significantly extend Qantas’s reach there. The airline will connect with WestJet flights via its U.S. gateways.

The Australian carrier plans to introduce a limited number of seasonal flights between Sydney and Vancouver in January, which could tempt it to start a more permanent service if they are successful.

Altogether, Qantas will offer 41 weekly flights to North America—split almost evenly between A380s and 747-400s.
Meanwhile, another major player is raising the stakes in the U.S.-Australia market. United plans to launch a direct Los Angeles-Melbourne route on Oct. 26, which will be its first with Boeing 787-9s. United also serves Sydney from Los Angeles and San Francisco.

The United move is partly responsible for Virgin Australia’s decision to cut its own Melbourne-Los Angeles flight as of Oct. 25, leaving Qantas and United to fight over the route. Instead, Virgin will add three flights a week between Brisbane and Los Angeles, making this a daily service. Qantas is the only other airline with flights from the West Coast to Brisbane.

Dropping Melbourne service will give Virgin two Australian hubs for North American flights—Sydney and Brisbane. The carrier believes concentrating on two gateways instead of three will strengthen its North American operation; both airports are domestic and international hubs for Virgin.

Virgin has a revenue-sharing partnership with Delta on transpacific flights, with combined twice-daily services between Los Angeles and Sydney. This has allowed the two to compete more effectively with the more mature United and Qantas transpacific operations.

Air New Zealand does not face the same level of competition on its transpacific flights; the only airline that flies direct between New Zealand and the West Coast. But it does have multiple rivals with one-stop service. United has flirted with the concept of a Houston-Auckland 787 route, but has shelved the plan for now.

The New Zealand airline has been progressively boosting its North American network, and plans to add seaonal frequencies to its twice-daily Auckland-Los Angeles flight during the next northern summer season. The airline also flies to San Francisco and Vancouver. It uses Boeing777s for its North American network, having recently retired the last two of its 747-400s.

Air New Zealand also operates a daily onward service to London from Los Angeles. This is in contrast to *Qantas, which flies westward to London via Dubai.

Hawaiian has a growing presence in Australasia. From its Honolulu hub, it serves Sydney, Brisbane and Auckland. It offers one-stop flights to many Western U.S. cities and even New York, particularly from the New Zealand market where it is the only U.S. carrier.
A version of this article appears in the October 6 issue of Aviation Week & Space Technology.
 
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