Qantas Plans Earlier Asia Arrivals Amid Business Class Push

Qantas Airways Ltd. (QAN), Australia’s largest carrier, will fly seven Asian routes earlier in the day as a partnership with Emirates gives it more scope to run flights at times that appeal to business class passengers.

The carrier will also look at whether to run direct flights from Australia to Beijing, Delhi and Mumbai from 2016, when it can exercise options to buy as many as 50 Boeing Co. (BA) 787-9 Dreamliners, it said in a regulatory statement. More 787 flights may be added to Seoul and Tokyo, Sydney-based Qantas said, where four of five direct routes are operated by its budget arm Jetstar and code-share partners.

Qantas international chief Simon Hickey wants to reschedule flight times to deliver better service to Asian destinations and win major corporate customers. The airline has spent A$9 million ($9.4 million) upgrading lounges in Hong Kong and Singapore and is considering refurbishing its Airbus SAS A330 aircraft to include lie-flat beds in business class, it said.

“There’s still some work to be done on this,” Russell Shaw, an analyst at Macquarie Group Ltd. in Sydney, said by phone. “I’d think this will be the first announcement of several as they ramp up these connections.”

Qantas shares were unchanged at A$1.54 at the close of trading in Sydney, while the S&P/ASX 200 index slipped 0.3 percent.

More Connections

Flights into Hong Kong, Singapore and Bangkok will be brought forward by as much as about four hours using capacity freed up by the agreement with Emirates. Service to Frankfurt will stop operating April 15, six months earlier than originally announced on April 15, Qantas said.

Trips from Melbourne to Singapore and Hong Kong, which currently arrive at 9 p.m. and 7:20 p.m., local time, will be moved to 5:10 p.m. and 3:55 p.m. to allow more connections into Asia and save passengers from having to stay overnight en route, according to a table provided with the announcement.

“The joint Qantas-Emirates network into Asia gives our customers a fresh set of options,” Hickey said in the statement. “Through a combination of Qantas, Jetstar and our partners we aim to provide the best travel options between Australia and Asia.”

The carrier is partnering with Emirates in a bid to end as much as A$450 million ($469 million) of annual losses on international routes. The so-called kangaroo route to Europe, which had previously transferred through Singapore, Hong Kong, and Bangkok, will be moved to the Gulf carrier’s Dubai hub and a 17-year alliance with British Airways on the long-haul routes will be dropped as a result.

Battery Malfunctions

Qantas canceled an order last August for 35 787-9 Dreamliner models worth about $8.5 billion at list prices. It’s also canceled one of the 15 shorter 787-8 models which its budget arm Jetstar is due to start receiving in the second half of this year, becoming the first carrier to drop an order since a series of battery malfunctions last month on flights operated by Japanese carriers.

Qantas’s announcement that it’s evaluating whether to extend routes to new destinations using the 787-9 doesn’t mean they’re any more likely to acquire the aircraft, Shaw said.

“They just say they’re examining it,” he said. “I’d hope they’d be doing that as part of their ordinary course of business.”

Qantas will also look at whether it can expand its Asian network through existing partners including Japan Airlines Co. (9201), China Eastern Airlines Corp. (670), Jet Airways India Ltd., Cathay Pacific Airways Ltd., and Malaysian Airline System Bhd., the company said.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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