Qantas is dropping a long-standing kangaroo route partnership with British Airways in favour of a 10-year global alliance with Emirates.
The two airlines will collaborate on pricing, sales and flight scheduling as the Australian carrier looks to turn around its loss-making international network.
The move comes just days after Gulf-based rival Etihad doubled its investment to 10% in Virgin Australia and will see Qantas move its hub for European flights to Dubai from Singapore.
Qantas will launch daily Airbus A380 services from both Sydney and Melbourne to London via Dubai. This means that together Emirates and Qantas will offer 98 weekly services between Australia and Dubai.
The airline is to restructure its Asian network in an effort to strengthen its focus on services to and within the region.
Qantas chief executive Alan Joyce said: “Over the past 17 years the joint business with British Airways has been central to the Qantas network.
“However, global operating conditions have changed and partnership with Emirates is the right strategy for Qantas.
“A key objective is to make Qantas International strong and viable, and bring it back to profitability. This partnership will help us do that.
“This Emirates partnership will help us make an orderly withdrawal, and also ensure we can continue to service our customers over the long term,” Joyce said.
Willie Walsh, chief executive of BA parent International Airlines Group, said the end of the joint business with Qantas would not affect the two airlines’ membership of the Oneworld alliance.
He said: “We’re ending the joint business on amicable terms and support Qantas’ decision to work with Emirates.
“The world has changed since 1995 when the joint business started. This is a small part of our overall network and this move fits in with changes in our global strategy.
“Asia has become a key market focus for IAG and we’re talking to a number of airlines about alternative options for us.
“Qantas has made it clear that its international performance has been weak and the termination of the joint business won’t have any negative impact on IAG’s financial targets.”
Qantas announced that “underperforming” flights to Frankfurt will be dropped.
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