Emirates to quit some New Zealand flights as part of new Qantas pact

[SINGAPORE] Emirates plans to end most of its flights between Australia and New Zealand as part of a renegotiated joint venture with Qantas Airways Ltd that will also see the Australian carrier quit flying to Dubai, the airlines said on Wednesday.

Qantas CEO Alan Joyce said the changes would allow the airlines to each leverage their network strengths; Emirates with its Dubai hub and Qantas with its dominant position in Australia.

"You can assume it is a win-win," he told Reuters while declining to provide financial details of the arrangement.

"We wouldn't be extending for another five years if we weren't getting a win out of it and Emirates certainly wouldn't be."

Unlike their original pact was signed five years ago, Qantas is now in a relatively stronger financial position than Emirates, with the Australian carrier in August reporting its second best-ever profit after cost-cutting helped turn around the business.

Emirates in May reported its first annual profit drop in five years due to overcapacity, security concerns and a fall in regional business travel.

"Increasingly it is Qantas driving the Emirates partnership," the CAPA Centre for Aviation wrote in a research note in August. "For Emirates this is not ideal but there are still very cogent reasons for the partnership and it would prefer a weaker partnership to none - or, worse, the prospect of Qantas working with one of Emirates' competitors."

The airlines said in August Qantas would stop flying to London via Emirates' Dubai hub when the alliance was renewed. Qantas' Sydney-London flight will instead stop in Singapore.

Emirates will keep a daily Sydney-Christchurch flight but quit the others between Australia and New Zealand from March, it said in a statement. Qantas said it would add more flights from Melbourne and Brisbane to Auckland to partially make up for the loss of capacity.

The Middle Eastern carrier said it would also evaluate potential new direct services between Dubai and New Zealand.

REUTERS