Australia- Flight of the airlines
It’s the end of the affair for Australia and continental carriers, writes Peter Needham.
Where have all the European airlines gone? One by one, the airlines based in continental Europe that used to fly to Australia have departed permanently. They are still represented here but they no longer fly their own aircraft into this country. The trend has accelerated over the past decade, with the final example, Austrian Airlines, pulling its aircraft out of Australia last year. Only two European airlines – British Airways and Virgin Atlantic – still fly to Australia with their own aircraft.
News this week that Franco-Dutch airline Air France-KLM is moving to take over Italy’s Alitalia raises a few names rich in Australian aviation history. KLM Royal Dutch Airlines started flights to Australia in 1938, with a one-way Sydney-to-London fare priced at slightly more than a year’s salary for the average Aussie. The journey took eight days. Alitalia began services from Italy to Tokyo and Sydney in 1960. Thousands of Italians who migrated to Australia in the 1940s and 1950s made their first trip back to the old country on Alitalia. Alitalia was quite colourful at the time – one passenger described its economy class as “like a flying Italian restaurant”.
UTA French Airlines used to fly here, too, before Air France absorbed it in the early 1990s. AOM French Airlines, taking advantage of the withdrawal of Air France from Sydney, began flying to Australia via Colombo in 1995. AOM, world’s biggest operator of DC10-30 aircraft at the time, was a colourful operator. On an AOM flight to Europe, I visited the galley in the early hours to get a glass of water, only to surprise two flight attendants (of opposite sex) locked in a passionate embrace while another swigged cognac from a bottle.
European airlines to have withdrawn from flying to Australia under their own colours over the past 20 years include Alitalia, Lufthansa, Air France, AOM, JAT Yugoslav, KLM, Olympic Airways and Austrian Airlines. Some of those carriers no longer exist or have merged. (In the case of JAT, even its home country no longer exists.) Other airlines, such as Lufthansa, still sell their tickets here but on a code-share or interline basis, which means passengers heading to Europe must fly on another airline to an intermediate point to join the airline of their choice. Book a flight to Europe with Lufthansa and you could fly from Australia on Singapore Airlines, South African Airways, Virgin Atlantic, United Airlines, Cathay Pacific or Air China. You’ll join a Lufthansa flight somewhere but you certainly won’t depart Australia aboard a Lufthansa aircraft.
The decision by Europe’s airlines to withdraw from Australia has much to do with the climbing price of fuel and the difficulty of turning a profit on the route, particularly in business class. It also reflects Australia’s geographical position. From Europe, it’s the end of the route (unless an airline elects to continue to New Zealand before turning back). Many European airlines find it more economical to fly to major hubs in Asia, such as Bangkok, Singapore, Hong Kong or Kuala Lumpur. There, passengers heading for Australia transfer to Asia-based airlines and fly the rest of the way.
Major new routes to Europe through the Middle East have emerged. Airlines from oil-rich states wield much financial muscle. They include Emirates (based in Dubai) and Etihad (Abu Dhabi). Both are expanding rapidly and have direct, same-airline services from Australia to Europe. Emirates serves more than 100 destinations, including London, Manchester, Glasgow and most major European and Australian capitals. It will start flying a giant new Airbus A380 aircraft on the Dubai-Sydney-Auckland run from next February. Etihad, which links Australia with London, Manchester and other European cities, was recently reported to have earmarked $22 billion for 100 new aircraft.
European airlines are merging, a trend set to continue as the EU becomes one market. Small national carriers can’t survive unless they join bigger airlines, either by merging or through alliance. At press time, struggling Alitalia is likely to accept the overtures of Air France-KLM. It reacted coldly to an earlier approach by Russia’s Aeroflot. Air France and KLM merged about five years ago. Mergers are seldom smooth because much national pride is wrapped in airlines. Spain’s Iberia has been up for grabs for some time but British Airways has so far been barred from taking it over.
The speed with which airlines can redeploy their aircraft to more lucrative routes was demonstrated vividly by Austrian Airlines. Austrian’s record in Australia was successful – starting when Lauda Air began flying here in 1991 with just one weekly flight. Lauda kept adding services to cater for demand and continued to do so after being taken over by Austrian Airlines. By 2004, Austrian was doing so well out of Australia, its services were tipped to reach twice-daily frequency. Australia and New Zealand became Austria’s third biggest non-European tourism source, after the US and Japan. Austrian’s general manager South West Pacific, Richard Froggatt, was awarded the Knight’s Cross First Class, a high Austrian honour usually reserved for heads of state and poets laureate.
By last year, the party was over. Austrian withdrew all its aircraft from Australian routes. It now favours the Middle East, Central and Eastern Europe.
Will European airlines return? The main hope lies with Canberra, which is keen to negotiate a more liberal “open skies” aviation agreement with Brussels. That might – just possibly – lure one or two European airlines back here.
European airlines, in common with counterparts around the world, are joining global alliances to gain economies of scale. The two biggest pacts are the Star Alliance and oneworld. Star Alliance groups 20 airlines, including such heavyweights as Lufthansa, United and Singapore Airlines, as well as Air New Zealand and Austrian. Its newest member, Turkish Airlines, will join this week. Members of oneworld include Qantas, British Airways, American Airlines and Cathay Pacific.
British Airways co-operates closely with Qantas on the route. They share a “joint services agreement” that allows them to operate virtually as one carrier, co-ordinating their scheduling, marketing and customer service activities and pooling revenue.
Virgin Atlantic has not yet joined one of the big alliances, making it a bit of a maverick. It flies daily between Sydney and London Heathrow, via Hong Kong. A spokesman said Virgin Atlantic enjoyed a healthy passenger mix of leisure, corporate and visiting friends and relatives travellers on the route.
SKY ALLIANCES
* European airlines, as with their counterparts around the world, are joining global alliances to gain economies of scale. The two biggest pacts are Star Alliance and Oneworld. Star Alliance includes heavyweights Lufthansa, United Airlines and Singapore Airlines, as well as Air New Zealand and Austrian Airlines. Oneworld’s members include Qantas, Cathay Pacific and American Airlines.
* British Airways and Virgin Atlantic are the only two European airlines still using their own aircraft to fly to Australia. BA shares a “joint services agreement” with Qantas that allows them to operate virtually as one carrier, co-ordinating their scheduling, marketing and customer service activities and pooling revenue.
* Virgin Atlantic has not yet joined one of the big alliances, making it a bit of a maverick. It flies daily between Sydney and London Heathrow, via Hong Kong.