Contributor - Middle East

Peter Shaw-Smith

Although Singapore and Dubai remain central to the so-called Kangaroo Route—the services flown between Australia and the UK, via Asia—the emergence of China’s airlines as players between Europe and Asia, as well as the U.S., will continue to affect the dynamics of international air travel. Some 20 airlines are believed to participate on the sector, including Emirates, Etihad, Cathay Pacific, Malaysian, Thai Airways, and a number of Chinese players.

 


The alliance between Qantas and Emirates remains the salient feature of the route’s dynamics. “Our alliance with Emirates gives customers access to more than 40 other destinations in Europe and the surrounding region, and we have applied for our alliance to be once again renewed,” a Qantas spokesman said.

 


In August, Emirates said it operated 77 weekly flights to Brisbane, Melbourne, Perth, Adelaide, and Sydney. “These currently include a triple-daily service between Sydney and Melbourne to Dubai, a twice-daily service from Brisbane and Perth and a daily service from Adelaide, including seven daily A380 flights,” it said. Emirates also operates 21 flights per week to New Zealand, all on the A380.

 


“One service daily from Sydney operates via Bangkok. One service daily from Brisbane operates via Singapore. One Melbourne service daily operates via Singapore."

 


“With changes in aircraft technology, we’ve seen the number of stops en route reduce, and with the start of our nonstop service from Perth to London [in March], we’re able to connect Europe and Australia in just one hop,” the Qantas spokesman said.

 


“We have also issued a challenge to Airbus and Boeing for them to have an aircraft capable of flying nonstop from the east coast of Australia to London or New York by 2022.”

 


Qantas operates two daily services to London, one from Sydney and one from Melbourne. Currently both flights operate through Dubai. From March, the Melbourne service will operate via Perth using the Boeing 787 Dreamliner and the Sydney service will once again operate via Singapore.

 


British Airways has been flying to Australia for more than 80 years.

 


“We are now the only European airline still serving the Australian market. We operate a daily service between Sydney and London via Singapore,” Nicole Backo, British Airways regional general manager, South West Pacific, told AIN.

 


In February 2013, British Airways and Cathay Pacific expanded their existing codeshare agreement to include Cathay Pacific’s routes between Australia and Hong Kong. “Since the end of the joint service agreement with Qantas in 2013, British Airways has remained loyal to serving the Kangaroo Route via Singapore. The airlines continue to work together as part of the Oneworld alliance and through bilateral codeshares,” she said.

 


BA's new codeshare agreement with China Southern Airlines offers additional options. “With the new agreement, our customers can connect on to Shenyang and Harbin through Shanghai, to Dalian through Beijing, and to Changchun through either Shanghai or Beijing. We offer 10 weekly flights to Shanghai and a daily service to Beijing from London Heathrow.”

 


<h2>Singapore Airlines on 'Kangaroo Route'</h2>

 


Singapore Airlines continues to make its presence felt in the market. “We have progressively expanded our capacity into and out of the Southwest Pacific in recent years, including through the addition of flights to Canberra that continue on to Wellington,” Nicholas Ionides, SIA divisional v-p, public affairs, told AIN.

 


“In addition to our extensive partnership with Virgin Australia, our strategic alliance with Air New Zealand has been progressing well, and was recently enhanced [by] jointly adding a third daily service between Singapore and Auckland from next year, while also revising schedules of current flights to shorten connection times and improve connectivity through the Singapore hub.”

 


Geoffrey Thomas, of Australia’s airlineratings.com, told AIN that Singapore Airlines had recently regained market share on the Kangaroo Route.

 


“I think SIA has fought back to increase its share. It used to be a very dominant carrier on that route. I think SIA have changed their product mix. They are more active in the market with pricing. They have fought back against the Middle East carriers.”

 


He believes the most interesting new dynamic is the Chinese carriers: China Eastern, China Southern and Air China carrying passengers from Australia to the UK via Guangzhou, Shanghai or Beijing.

 


“They are so competitive on price. From Perth to Los Angeles, China Southern were offering people S$800 (US$600) return. Perth-Guangzhou-Los Angeles return. They are really destabilizing the market, causing Cathay Pacific a lot of strife, because they lower the price-point, the perception of what the price should be. For Cathay to compete, they have to drop their prices,” he said.

 


“That is just an example of what they are doing. London was around S$900-S$1,000 return. The Chinese have a lower cost-base. [Emirates president Sir] Tim Clark has talked about the influence of the Chinese airlines as one of the big factors going forward.

 


“You’ve got the low-cost long-haul guys, the Scoots [a subsidiary of SIA], now going into Athens and Berlin, and other destinations as well, you’ve got the Norwegians who are coming up the other way—and the Chinese. All these people put prices in the market.

 


“Someone says: ‘I can go Scoot to Athens for S$600 return. Why should I pay S$2,000 to go to London? I’ll go to Athens on Scoot and jump on another low-cost carrier.’

 


“It’s one thing for them to travel on those carriers. They may not. But the pricing in the marketplace gets in people’s headspace. That’s where the benchmark is. ‘That’s where my price should be.’

 


“The issue for these other airlines is: ‘I’m looking in the newspaper or online. What are the best deals? China Southern S$800 London, S$900 Paris. That is where I think the price should be.’ It’s people’s perception of where the airfares are.”

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