Is Australia to London direct non-stop Qantas’ dream come true?

The first nonstop flights between Australia and the UK provides enormous potential for Western Australia to become a tourism gateway, according to Scientia Professor John Roberts from the UNSW Business School.

"Clearly for traffic originating in Perth or having Perth as a final or intermediate destination the news is unambiguously positive," he says. "The new route is creating a real buzz in tourism in Western Australia."

He adds that some feats are remarkable for their vision and courage. "The Anglo-French Concorde was a great example of that; a wonderful and noble endeavour that lost its partners a lot of money.  Will Qantas' new Perth to London route be another example of that?" he questions.

"For those two market segments, into and out of Perth, securing these Dreamliner flights is a real coup; it has given Perth the opportunity to make a significant push into the important British tourism market," he says. It also makes Europe more accessible to West Australian which has a tendency to feel a bit isolated from the rest of the continent.

However, he says the main game is, and will remain, the East of Australia. "It's not well known, but this direct flight actually starts in Melbourne, offering Perth as another one-stopover point to London. And London is by far where most Aussies want to fly to. That's why Qantas has just opened a new QantasClub in London. Sure, it may not make total economic sense to open a QantasClub for 42 Business Class passengers a day from London to Perth, but it gives Qantas enormous 'impact' in Heathrow, and it's an amazing marketing tool." 

However, he warns "It is highly unlikely that QANTAS's passengers from the East, both inbound and outbound, will be flocking to this new service. Perth faces many of the same challenges as Dubai as a stepping stone to London from Sydney and Melbourne; it is small and thus is not a great aggregation point, it has limited functionality as a stop in its own right, and most importantly it divides the Kangaroo route into two very unequal chunks."

Meanwhile, he says it is no surprise that Qantas has made a dramatic turnaround in its routes from Sydney. "Qantas will return to flying to London via Singapore from Sydney and axe the unpopular route via Dubai it started five years ago." He says customers like spacing out their stop on the way to Europe.  "The splitting of the kangaroo route into a 14 hour hop to Dubai, followed by a 7 hour one to London did not add up. Dubai could never match the charms of Singapore as a stepping stone to Europe. It's quite right that Qantas abandon Dubai."

"Qantas can also continue to clip the ticket on Emirates flights through Dubai into all of Europe. And it can continue to get scale in the highly attractive South-Eastern Asia market." He adds. "All it has to do is work out how to handle its arrangements with its One World Alliance partners. The British Airways relationship remains a pesky one after Qantas burnt its previous agreement to pass traffic to each other's aircraft five years ago."

Frenemies are so much harder to manage than either friends or enemies," Professor Roberts says. "And BA is Qantas' frenemy.  There will be winners and losers. If one looks at the numbers, it looks as though on balance Qantas will be a loser with a dream half full."

Professor Roberts can discuss the implications of the challenges facing Qantas, as it starts London non-stop, and abandons Dubai."

For further comment call John Roberts on 02 9385 9698, 0421 078355, or email johnr@agsm.edu.au

Media contact: Julian Lorkin: 02 9385 9887