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Analysts say a codeshare or other partnership would let cash-strapped Qantas tap into Emirates' long list of European destinations while it focuses more on Asian markets closer to home. Such a deal could shift some Qantas stopover traffic from Singapore to Dubai and reduce its reliance on European hubs such as London's Heathrow and Frankfurt, Germany
-- strongholds of British Airways and Lufthansa. Emirates airline is part of state-owned Emirates Group, which is doing deals on the ground too. Its travel service and cargo division Dnata last year acquired British online travel agency Travel Republic and half of a South African in-flight catering company. Qantas' talks with Emirates follow Etihad's June announcement that it acquired a stake in Qantas' competitor Virgin Australia. Australian regulators recently gave Etihad the green light to boost its stake in the Australian airline to 10 percent. The younger Etihad sees its investments in overseas airlines and a fast-growing network of codeshare partners as a way to gain an edge over its larger Gulf rivals. In early July, it said its strategy of partnering with other airlines helped drive sales more than 30 percent higher in the second quarter. "To stretch our market, these partnerships are key," Etihad President and CEO James Hogan told The Associated Press at the time. The deals help cement Etihad's relationships with its partner airlines and could lead to cost savings, though analysts say it is tough to quantify how much advantage the acquisitions bring.
"Even if there are incremental benefits, minority ownership does not equate to control," said Sudeep Ghai, partner at London-based airline consultants Athena Aviation. In addition to its Virgin Australia and Aer Lingus stakes, Etihad owns nearly 30 percent of Germany's second-biggest airline, Air Berlin, and 40 percent of Air Seychelles, the island country's national carrier. Qatar Airways, meanwhile, is looking for cross-border opportunities closer to home. Its chief executive recently held talks with Saudi officials about launching a new airline registered in the oil-rich kingdom, though he expressed concerns about price caps imposed by Riyadh. There is strong demand for flights within the vast country, the largest Arab economy. Foreign carriers are able to fly to and from Saudi cities from abroad, but only Saudi Arabian Airlines and budget airline NasAir operate domestic routes. Saudi officials have invited bids from airlines interested in gaining a license to operate domestic flights. They are expected to make a decision later this year.
[Associated
Press;
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