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Ailing Qantas announces alliance with Emirates

By Paul Armstrong, CNN
September 6, 2012 -- Updated 1507 GMT (2307 HKT)
Frequent flyers with Emirates and Qantas will be able to enjoy benefits with both airlines.
Frequent flyers with Emirates and Qantas will be able to enjoy benefits with both airlines.
STORY HIGHLIGHTS
  • Australian carrier will transfer its hub for European flights from Singapore to Dubai
  • Qantas CEO Alan Joyce says the new partnership will benefit frequent flyers
  • Emirates: Deal provides passengers with additional connectivity in Australia
  • Qantas' international arm is struggling with losses amid soaring costs

Hong Kong (CNN) -- Qantas has agreed a 10-year partnership with Emirates, as it seeks to revitalize its ailing international business.

As part of the deal, the Australian carrier will transfer its hub for European flights from Singapore to Dubai from April next year -- subject to regulatory approval.

Qantas said its daily Airbus A380 services to London from Melbourne and Sydney will transit via Dubai's Terminal 3, the world's only purpose-built A380 terminal.

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"This is a partnership of independent peers, based on shared standards and aspirations," said Qantas CEO Alan Joyce at a joint press conference with Emirates President, Tim Clark, in Sydney Thursday.

"We have agreed to join forces to give our customers the most comprehensive premium travel experience on the planet.

"We will be poised to deliver the best in networks, frequencies, lounges, loyalty programs and customer experience."

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He added that the deal would not involve equity investment on either side.

Joyce said the new partnership would benefit its frequent flyers in particular, with the airlines offering reciprocal access to tier status benefits, including end-to-end recognition of customers, lounge access and priority check-in and boarding.

The deal comes at a time when the Australian carrier's international business continues to hemorrhage money. Earlier this month Qantas announced its first annual loss since being privatized in 1995 -- $256 million for the year to June 30.

It also scrapped an order worth $8.5 billion for 35 Boeing 787 "Dreamliner" jets, as it battles the effects of soaring fuel prices and industrial action.

Emirates, which has itself experienced the crippling effects of rising fuel costs, also welcomed the deal.

"The time was right for developing a long term, future forward partnership with Qantas, the iconic Australian airline," Clark said.

"Since our first flights began in 1996, Australia has long been a popular destination for Emirates leisure and business travelers, making it one of the top three destinations in our network.

"By establishing this partnership we are providing our passengers with additional connectivity in Australia and the region and the ability to utilize enhanced frequent flyer benefits, and have access to premium lounges for an exceptional travel experience," he added.

Shares in Qantas rose by almost 5% on news of the alliance.

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