Half of Qantas' Dubai flights in a holding pattern

Dubai is Qantas' new gateway to Europe… but the airport is in urgent need of repairs

Scott Phillips (TMFGilla)

Scott Phillips is The Motley Fool’s Chief Investment Officer in Australia. He is Advisor of The Fool’s flagship investment service, Motley Fool Share Advisor and the Portfolio Manager of Motley Fool Everlasting Income and Premier Portfolio, as well as running our most premium service, Motley Fool Platinum. He is passionate about investing, having managed his own portfolio for over 15 years. A dyed-in-the-wool Fool (in the best way), he has been a member of The Motley Fool since 1999. Scott holds a Bachelor of Commerce (Management) and a Graduate Diploma of Accounting. Before joining The Fool, Scott worked in various Sales and Finance roles in industry, which has allowed him to see the good, bad and the ugly of corporate management close-up. Giving him a great understanding of the way businesses run – and what separates the business wheat from the chaff – Scott wholeheartedly agrees with Warren Buffett when he said he was a ‘better investor because I am a businessman and a better businessman because I am an investor’. Scott left a successful career to follow his passion – helping our members achieve the best possible investment returns, and helping Australians learn to better manage their money. It’s no surprise he ended up at The Motley Fool.

Published August 14, 2013 9:15 am AEST

Sometimes, no matter how hard you try, life seems to kick you in the guts.

Not long after Qantas (ASX: QAN) announced – with much fanfare – its brand new alliance with Emirates that would see London-bound passengers fly via Dubai, that airport has announced that it will be undertaking urgent maintenance that will see the number of plane movements potentially halve for a three month period.

The Sydney Morning Herald is reporting that the repair work will require 180,000 tonnes of asphalt and is threatening Qantas' 28 weekly landing slots, though the company is apparently 'much closer' to the 28 slots it needs that it was after the original proposal was released.

Reduced schedules are something of a double-edged sword. On one hand, airlines need to have flights scheduled when its customers want to fly, but on the other hand, there will be some bean counters at the Flying Kangaroo that are more than happy with the reduced capacity and the positive impact that will have on the airline's financials – at least in the short term (and assuming it can redeploy the otherwise idle aircraft).

Capacity has been something of a bane for Qantas and domestic competitor Virgin Australia (ASX: VAH) here at home, too. Both airlines are finding it tough to fill the available seats, which, at low prices, can make profitability an elusive adversary.

Foolish takeaway

Over the past 5 years, while the ASX 200 has gone, well, nowhere fast, the two airlines have both seen their share prices fall by over 50%. When it comes to air travel, it seems everyone makes money for investors but the airlines – with the likes of Sydney Airport (ASX: SYD) up 26% and travel agent Flight Centre (ASX: FLT) booking (if you'll excuse the pun) 134% share price gains.

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Motley Fool advisor Scott Phillips doesn't own shares in any company mentioned in this article.

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