Emirates tipped to fly transtasman route

By CHRIS DANIELS aviation writer

Dubai-based airline Emirates is expected to start flying to New Zealand soon, as part of the price it has paid to the Australian Government for greater access Downunder.

Emirates, the flag carrier of the United Arab Emirates, has this week been talking with the Australian Federal Government about expanding its services between Dubai and Australia.

In return for allowing more flights - which means more competition for Qantas on lucrative long-haul routes to Europe - the Australian Government will be hoping that Emirates' presence on the transtasman route will reduce anti-competitive concerns surrounding the proposed Qantas-Air NZ alliance.

The Australian Financial Review reports that Federal Transport Minister John Anderson had agreed to Emirates' flying from any Australian port to New Zealand, but rejected its request to fly twice a day from Sydney to Dubai.

Emirates will be able to operate twice daily services to Dubai from Melbourne, Brisbane and Perth from October.

If it began flying to New Zealand, it would join other airlines such as Thai, Malaysia, Lan Chile and Garuda, which fly across the Tasman as part of their schedules.

Air New Zealand and Qantas will point to these airlines - and the likely entry of Virgin Blue - as proof of competition on the Tasman route.

Despite the Australian Government's views, the entry of the Dubai carrier is not likely to impress Qantas.

The airline's chief financial officer, Peter Gregg, told the AFR that Emirates was a "spearhead for the policies of the Government of the United Arab Emirates" that distorted free-market competition.

Speaking to the Business Herald just after the alliance deal was announced, Qantas chief executive Geoff Dixon said that carriers he described as "just arms of Government policy" were distorting the economics of the industry. They did not have to make money, but Qantas and Air NZ had to compete with them.

The robust financial health of Emirates is visible in a reported $20 billion order for new jets it will soon announce, expected to include 23 Airbus A380s capable of seating 555.