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Qantas' Asian transformation, relaunching Beijing & Melbourne-Tokyo; highest Asian activity ever

Analysis

Qantas has been transforming in Asia. Its partnership with Emirates and shift of European stopover hub from Asia to Dubai drove a need for Qantas to restructure its Asia network to support the local market, and not onward connections to Europe. Widebody capacity has become available as Qantas further decreases widebody services in the domestic market, which was overcompetitive and impacted by a decline in the resource sector, which was a key corporate contract focus.

In calendar 1Q2017 Qantas will operate more flights to Asia than at any time this decade, including prior to its Emirates-necessitated restructure.

Seat capacity has reduced slightly, reflecting the use of smaller aircraft (A330s instead of A380s) but Qantas still has more seats for the local market since it no longer sells onward flights to Europe. Qantas' most recent Asian additions are the relaunching of Melbourne-Tokyo (taking the service over from Jetstar, which will instead open new flights to Vietnam) and Sydney-Beijing - an important market for its JV with China Eastern as Virgin Australia signals its intent to fly to Beijing in 2017, in partnership with HNA.

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