The West

Emirates boss upbeat about Qantas tie-up
Emirates boss upbeat about Qantas tie-up

Emirates Airlines president Tim Clark has delivered a ringing endorsement of Qantas chief executive Alan Joyce's strategy, claiming that instead of facing eventual bankruptcy the Australian airline's share price will climb over the next three years.

And Mr Clark, one of the most powerful executives in global aviation, also dismisses suggestions that the proposed alliance between Emirates and Qantas is a one-sided deal.

"We want them to be a robust partner," Mr Clark said. "On paper this deal has great potential and all you need to do is look beyond the current global recession."

The two airlines announced their plan for a 10-year global partnership early in September. The deal would involve an extensive code-sharing arrangement, reciprocal frequent-flyer benefits and joint marketing, pricing and co-ordination on certain routes.

The tie-up with Emirates is seen as a key plank in Mr Joyce's bid to turn around the Flying Kangaroo's struggling international operations, which reported a $450 million loss in 2011-12. Over the past t24 months Qantas has cut jobs, routes and deferred planes in a bid to stem losses in its international division.

The Australian Competition and Consumer Commission is evaluating the proposed alliance and was expected to issue a draft determination by the end of the year, with a final decision due in March.

Speaking with _WestBusiness _at the airline's Dubai headquarters, Mr Clark said that "given the trading circumstances, Qantas has been having great difficulty pursuing the strategy that Alan inherited".

"This was a structural problem and couldn't be solved overnight with a magic wand, was accentuated by the global recession and needed to be dealt with in a structural way," Mr Clark said. "To have done nothing would have been a disaster and the airline would have been bankrupt eventually."

The alliance with Emirates is a key platform for the turnaround of Qantas's international arm, which has been a major loss maker in recent years.

Mr Clark also threw his support behind Mr Joyce's controversial decision a year ago to ground the Qantas fleet as part of escalating tensions with unions.

"I couldn't have done anything else," Mr Clark said. The Emirates boss added that Mr Joyce had picked out the things that were working - such as Jetstar, the frequent flyer program and Qantas domestic - and was growing them.

"These issues - the grounding - are watersheds that had to happen to reposition the airline," Mr Clark said.

In a blunt note on the agitation by former Qantas management and equity investors wanting to buy a stake in the Flying Kangaroo, Mr Clark said perhaps Mr Joyce's predecessors should be asked about their roles in devising the airline's strategy that Mr Joyce inherited.

But the Qantas takeover rumours do not surprise him. "Nothing surprises me. They will gain traction, particularly with the unions," he said.

"It will not be the last but I assure you within three years things will be completely different (at Qantas). They will be eating their words.

"The Qantas share value will rise and it's trading well below par at the moment, investor interest will increase, as will respect increase for what they are doing."

These issues . . . are watersheds that had to happen to reposition the airline."

Emirates Airlines boss Tim Clark <div class="endnote">


The West Australian

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