New Air Service Agreement opens door for Emirates and Etihad growth in Australia

A revision to the current Bilateral Air Service Agreement between Australia and United Arab Emirates (UAE) will facilitate a rise in air links between the two counties and enable the Gulf hub giants Emirates Airline and Etihad Airways to introduce additional flights into the primary markets of Brisbane, Melbourne, Perth and Sydney.

Under the terms of the revised agreement, designated Australian and UAE airlines will be able to operate an extra 14 weekly frequencies between the two countries from October 2016, up from the seven offered as part of a previous deal. Alongside the fast-expanding UAE national entities, this will permit Qantas and Virgin Australia to also boost its flights to Abu Dhabi and Dubai, markets its currently serves in partnership with the two Gulf carriers.

The agreement was reached following talks at the International Civil Aviation Organization (ICAO) Air Services Negotiation event in Turkey this month and impacts the primary markets of Brisbane, Melbourne, Perth and Sydney as UAE carriers already have unlimited traffic rights to destinations other than the four major gateways.

Australia’s Deputy Prime Minister and Minister for Infrastructure and Regional Development, Warren Truss said Australian travellers and businesses have benefited enormously from improved access to the global hubs of Dubai and Abu Dhabi due to its air service negotiations, with over three million passenger journeys being made in the past 12 months alone.

“The Australian Government is committed to supporting the entry of Australian airlines into foreign markets and ensuring we have the aviation capacity necessary to meet future demand. I am confident the arrangements settled this week will only strengthen our aviation relationship further,” he said.

The balance of capacity between Australia and UAE is heavily skewed to the Gulf carriers. Emirates Airline this month serves Adelaide, Brisbane, Melbourne, Perth and Sydney from its Dubai International Airport hub with 49 return flights a week offering more than 23,000 seats in each direction. The airline also provides 28 flights a week between Australia and New Zealand as onward connections.

It dominates the Australia-UAE market with a 51.2 per cent capacity share ahead of Etihad Airways, which offers 39 flights per week between Abu Dhabi International Airport and Brisbane, Melbourne, Perth and Sydney; Qantas, which has daily flights from Melbourne and Sydney to Dubai and onward to London; and Virgin Australia, which has up to three flights per week between Sydney and Abu Dhabi.

The new agreement between Australia and UAE follows the recent amendment to the Air Service Agreement between Australia and Qatar which has permitted Qatar Airways to introduce new link between its Hamad International Airport hub in Doha and both Adelaide and Sydney.

The expanded bilateral between the countries, allows 50 per cent more flights on the Australia-Qatar route with immediate effect. The agreement will allow for up to 21 flights each week, each way, for airlines of both countries to the major gateways of Sydney, Melbourne, Brisbane and Perth and also provides unlimited services from Qatar to secondary/regional ports including Darwin, Adelaide, the Gold Coast and Cairns.