Global realities

If you harbored any doubts that a new generation of air carriers from the Middle East and Asia were reinventing international aviation, Emirates and Qantas have given you still another reason to let go of those doubts.

The decision by Qantas to terminate its joint venture with British Airways (BA) in favor of a new relationship with Emirates reflects some new global realities.

Even though this change, reported in our news pages a week ago, seems to have no immediate effect on North America, the global realities are nevertheless quite global and quite real.

One-time competitors Qantas and BA turned the Sydney-London "kangaroo route" into a joint venture in 1995. A benefit for Qantas passengers was the ability, after arriving at Heathrow, to connect to any point on the BA system. That was the idea.

The new idea for Qantas, beginning next April, is to route the flights through Dubai, where passengers from Australia can connect to dozens of Emirates destinations throughout Europe and the Middle East and parts of Asia and Africa.

Qantas and BA are legacy carriers with long histories and close commercial and cultural ties. They are among a number of airlines from diverse nations around the world that have come together in alliances (Oneworld, Star, SkyTeam) to create synergies and share revenue under joint venture arrangements that operate under antitrust immunity.

For Qantas, however, it was no longer enough to sustain its kangaroo route. Dubai trumps London.

Aviation analysts have been saying for years, ever since Bahrain's meteoric rise and fall in the previous century, that airports in the Middle East are well positioned to become the crossroads of global aviation.

The proverbial globe-and-string test bears this out. In addition to the kangaroo route, think China-Brazil, China-Africa, North America-India, Europe-India, Europe-Southeast Asia.

The story of Qantas and Emirates and the kangaroo route is a unique story, but something tells us that the broad outlines of this story are going to be repeated more than once in other locations in the years ahead.
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