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Qantas alliance may expand to support services

Date: February 28 2013

Matt O'Sullivan

QANTAS has left the door open to broadening its alliance with Emirates to include ground handling and support services, but is willing to exclude them from the present deal to allay concerns from unions.

With just four weeks to go before the alliance is due to be launched, Qantas has sought to make clear that the focus of the alliance is on flying operations, and that the two airlines have not begun any talks or planning about operations such as ground handling, catering or aircraft engineering.

''There are no current plans for co-ordination [of non-flying operations] in Australia at this time,'' it said in a submission to the Australian Competition and Consumer Commission.

However, Qantas noted that the two airlines' flying operations might jointly look to buy services from other companies that offer ground handling, engineering and catering operations.

Qantas' catering operations include Q Catering and Snap Fresh, while Emirates' associate Dnata owns Alpha Flight Services. The latter has about 1200 employees in Australia. As well as supplying their respective fleets, the catering businesses provide meals for other airlines that fly to and from Australia.

Qantas and Emirates said they were willing ''to exclude co-ordination between catering and aircraft cleaning operations'' from their alliance ''in order to seek to allay issues'' raised by trade unions such as the Transport Workers Union.

But it said that ''any potential co-ordination between the catering and aircraft cleaning operations would, if considered necessary at the time, be subject to a separate application''.

The long-haul pilots' union and the TWU, which represents baggage handlers, have also raised concerns that jobs could be threatened by a ''narrowing of competition and a transfer of flying to Emirates'' on services from Perth and Adelaide to Europe and Asia.

But Qantas said jobs would be ''more secure'' with the deal, emphasising that it would be forced to cut more services to Europe if it did not go ahead.

The competition regulator has given a tentative nod of approval to the Qantas-Emirates alliance but will not make a final decision until next month. The airlines plan to launch their alliance on March 31.


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