Virgin Australia, Etihad Renewing Alliance on Australia-Europe Routes

14th Aug 2015

According to the data by competition regulator, the number of travelers between Australia and Europe grew 19.6 per cent in the period between 2010 and 2014. At the same time, the number of passengers traveling through the Middle East went up from 17 per cent to 31 per cent over that period, with Qantas moving its European hub to Dubai, Virgin Australia operating flights to Abu Dhabi, and ME carriers growing.

Until 2012, Qantas carried the most passengers between Australia and Europe, but today Emirates hold that position. As a result, the two carriers started talking about an alliance, which was approved and began in March 2013.

Today, Emirates carries over a quarter of all passengers between Australia and Europe. Qantas is at second place with a little over 15 per cent, but is closely followed by Singapore Airlines, which is also close to 15%.

Together, Virgin Australia and Etihad carry about 16% of passengers on the Kangaroo route. This includes Virgin Australia's three weekly flights on Sydney-Abu Dhabi-Sydney route.

According to Etihad, it will expand its services out of and from Australia if its alliance with Virgin is re approved. The alliance is important for Etihad as it allows the airline to connect customers to destinations it normally does not service.

Etihad also said it is planning to open a lounge at the Melbourne Airport sometimes in early 2016, in addition to the one it already has in Sydney.

This week, Emirates said it will upgrade its Melbourne-Singapore-Dubai route from the Boeing 777-300ER it currently uses to Airbus A380 from March.

Virgin Australia and Etihad told the ACCC (Australian Competition and Consumer Commission) they are also looking to bring a few benefits to high-value passengers as well as elite-level loyalty program members.