A year ago yesterday, Emirates Airline and Australia's Qantas launched their partnership with a breathtaking double-A380 fly-by over Sydney Harbour.
Unsurprisingly, Emirates is already a bigger winner in an alliance that resulted in a switch of the stopover for Qantas long-haul flights to Dubai from Singapore, helping to boost passenger traffic at Dubai International Airport by 11.7 per cent in February compared to a year earlier.
Government data last week also showed that Australasia was the fastest-growing market for passenger traffic at Dubai International, increasing by 30.5 per cent on the back of the tie-up.
Emirates has already leveraged its relationship with Qantas to expand its market share in Asia-Pacific. In February it signed a codeshare agreement with Jetstar, Qantas’s low-cost unit. Emirates said the agreement would give its passengers access to 27 new routes and six new destinations in Australia, New Zealand and Asia.
“Qantas needs Emirates more than Emirates needs Qantas,” said Will Horton, a senior analyst at the Sydney-based Centre for Aviation (Capa).”Emirates certainly had no problems being successful in Australia before the Qantas partnership.”
The Australian carrier is struggling with financial woes, ironically brought on by fierce competition from Gulf carriers including Emirates.
Known as the flying kangaroo, Qantas in February reported a loss of A$235 million (Dh771.4m) for the second half of last year, compared to a profit of A$109m a year earlier. The company said it would cut 5,000 jobs from its total workforce of 32,000.
“Qantas is a structural mess and no one wants to touch it with a bargepole. And quite rightly, too. Qantas represents everything that is wrong in how to run an airline,” said Saj Ahmad, the chief analyst at StrategicAero Research.
However, in a sign that Qantas has come to accept the need for a full reckoning, the airline has begun to cut costs. Qantas said it was planning to sell or defer the purchase of 50 aircraft and defer orders for eight Airbus A380s and three Boeing 787 Dreamliners that it had ordered for Jetstar.
“The situation with Qantas is severe, but there is a path ahead, although that requires much restructuring, which Qantas is starting to do,” said Mr Horton.
Hit by high fuel costs, aggressive competition and slow international demand, Qantas also faces tough competition at home, highlighted by a price war with Virgin Australia, a partner of Etihad Airways.
“Any increased exposure in Virgin will mean Etihad will be more exposed to any turbulent times ahead, but Etihad has made clear this is a long-term investment,” said Mr Horton.
However, unlike Virgin Australia, which is majority owned by Etihad, Air New Zealand and Singapore Airlines, Qantas by law must stay primarily in Australian hands.
James Hogan, the Etihad chief executive, has said the Abu Dhabi carrier might increase its stake in Virgin. Yesterday, Singapore Airlines raised its stake in Virgin to 22.1 per cent from 19.8 per cent.
“Qantas is an inept and inefficient dinosaur like many European Union and United States airlines, and Etihad can push Virgin Australia to hit Qantas where it hurts while also poaching international traffic,” Mr Ahmad said.
The Australian government is weighing the removal of a 49 per cent cap on foreign ownership in Qantas, a proposal that is being challenged by opposition parties such as Labor and the Greens.
“Emirates won’t be affected by Qantas’s ownership laws since Emirates has stated quite clearly it isn’t interested in buying any airline stakes – least of all Qantas,” Mr Ahmad said.
But the potential downside for their partnership, which lasts for another four years, is the arrival of an investor who would change the current status quo.
“Any potential future investor in Qantas would want Qantas to maximise its potential, which the Emirates partnership can help do,” said Mr Horton.
“But the risk is if an investor is an airline in an overlapping market, such as an Asian airline serving Australia and Europe. That airline may want some of Qantas’s Europe traffic routed away from Dubai,” he added.
However, despite Emirates’ lack of interest in investing in other carriers, its strategy is not written in stone.
The Emirates president, Tim Clark, said last month: “We have no plans at the moment to buy stakes in other airlines. I never say never because I’m not going to be always sitting here forever, so others coming after me may say that’s what they want to do. I don’t know.”
selgazzar@thenational.ae
Follow us on Twitter @Ind_Insights
Nick's journey in numbers
Countries so far: 85
Flights: 149
Steps: 3.78 million
Calories: 220,000
Floors climbed: 2,000
Donations: GPB37,300
Prostate checks: 5
Blisters: 15
Bumps on the head: 2
Dog bites: 1
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Zayed Sustainability Prize
Sun jukebox
Rufus Thomas, Bear Cat (The Answer to Hound Dog) (1953)
This rip-off of Leiber/Stoller’s early rock stomper brought a lawsuit against Phillips and necessitated Presley’s premature sale to RCA.
Elvis Presley, Mystery Train (1955)
The B-side of Presley’s final single for Sun bops with a drummer-less groove.
Johnny Cash and the Tennessee Two, Folsom Prison Blues (1955)
Originally recorded for Sun, Cash’s signature tune was performed for inmates of the titular prison 13 years later.
Carl Perkins, Blue Suede Shoes (1956)
Within a month of Sun’s February release Elvis had his version out on RCA.
Roy Orbison, Ooby Dooby (1956)
An essential piece of irreverent juvenilia from Orbison.
Jerry Lee Lewis, Great Balls of Fire (1957)
Lee’s trademark anthem is one of the era’s best-remembered – and best-selling – songs.
The bio
Academics: Phd in strategic management in University of Wales
Number one caps: His best-seller caps are in shades of grey, blue, black and yellow
Reading: Is immersed in books on colours to understand more about the usage of different shades
Sport: Started playing polo two years ago. Helps him relax, plus he enjoys the speed and focus
Cars: Loves exotic cars and currently drives a Bentley Bentayga
Holiday: Favourite travel destinations are London and St Tropez
Tributes from the UAE's personal finance community
• Sebastien Aguilar, who heads SimplyFI.org, a non-profit community where people learn to invest Bogleheads’ style
“It is thanks to Jack Bogle’s work that this community exists and thanks to his work that many investors now get the full benefits of long term, buy and hold stock market investing.
Compared to the industry, investing using the common sense approach of a Boglehead saves a lot in costs and guarantees higher returns than the average actively managed fund over the long term.
From a personal perspective, learning how to invest using Bogle’s approach was a turning point in my life. I quickly realised there was no point chasing returns and paying expensive advisers or platforms. Once money is taken care off, you can work on what truly matters, such as family, relationships or other projects. I owe Jack Bogle for that.”
• Sam Instone, director of financial advisory firm AES International
"Thought to have saved investors over a trillion dollars, Jack Bogle’s ideas truly changed the way the world invests. Shaped by his own personal experiences, his philosophy and basic rules for investors challenged the status quo of a self-interested global industry and eventually prevailed. Loathed by many big companies and commission-driven salespeople, he has transformed the way well-informed investors and professional advisers make decisions."
• Demos Kyprianou, a board member of SimplyFI.org
"Jack Bogle for me was a rebel, a revolutionary who changed the industry and gave the little guy like me, a chance. He was also a mentor who inspired me to take the leap and take control of my own finances."
• Steve Cronin, founder of DeadSimpleSaving.com
"Obsessed with reducing fees, Jack Bogle structured Vanguard to be owned by its clients – that way the priority would be fee minimisation for clients rather than profit maximisation for the company.
His real gift to us has been the ability to invest in the stock market (buy and hold for the long term) rather than be forced to speculate (try to make profits in the shorter term) or even worse have others speculate on our behalf.
Bogle has given countless investors the ability to get on with their life while growing their wealth in the background as fast as possible. The Financial Independence movement would barely exist without this."
• Zach Holz, who blogs about financial independence at The Happiest Teacher
"Jack Bogle was one of the greatest forces for wealth democratisation the world has ever seen. He allowed people a way to be free from the parasitical "financial advisers" whose only real concern are the fat fees they get from selling you over-complicated "products" that have caused millions of people all around the world real harm.”
• Tuan Phan, a board member of SimplyFI.org
"In an industry that’s synonymous with greed, Jack Bogle was a lone wolf, swimming against the tide. When others were incentivised to enrich themselves, he stood by the ‘fiduciary’ standard – something that is badly needed in the financial industry of the UAE."
Gully Boy
Director: Zoya Akhtar
Producer: Excel Entertainment & Tiger Baby
Cast: Ranveer Singh, Alia Bhatt, Kalki Koechlin, Siddhant Chaturvedi
Rating: 4/5 stars
ACC 2019: The winners in full
Best Actress Maha Alemi, Sofia
Best Actor Mohamed Dhrif, Weldi
Best Screenplay Meryem Benm’Barek, Sofia
Best Documentary Of Fathers and Sons by Talal Derki
Best Film Yomeddine by Abu Bakr Shawky
Best Director Nadine Labaki, Capernaum
BULKWHIZ PROFILE
Date started: February 2017
Founders: Amira Rashad (CEO), Yusuf Saber (CTO), Mahmoud Sayedahmed (adviser), Reda Bouraoui (adviser)
Based: Dubai, UAE
Sector: E-commerce
Size: 50 employees
Funding: approximately $6m
Investors: Beco Capital, Enabling Future and Wain in the UAE; China's MSA Capital; 500 Startups; Faith Capital and Savour Ventures in Kuwait
