Virgin Boss Credits Qatar Deal with Lowering Airfares
An airline alliance approved by the competition watchdog is already driving up airfare sales, according to Virgin Australia.
The Australian Competition and Consumer Commission has given the green light to Virgin Australia and Qatar Airways for a five-year partnership that is expected to double flights between Australia and Doha.
“We are already seeing positive impacts of the partnership, such as increased sales of airfares between Australia and Europe, the Middle East, and Africa due to heightened competition,” said Virgin Australia CEO Dave Emerson.
“We are excited to welcome Qatar Airways not only as a strategic partner but also as a part owner of Virgin Australia.”
Qatar acquired a 25% stake in Virgin in February, marking the latest development in the partnership first proposed to the regulator in mid-2022.
The commission has permitted Virgin to introduce 28 new weekly flights between Australia and Doha, which the airlines estimate will contribute $3 billion (US$1.9 billion) to the national tourism economy over five years.
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“We believe that this partnership will bring public benefits by increasing capacity on flights between Australia and the Middle East while having minimal negative impact,” stated Commissioner Anna Brakey.
“This is expected to lower prices on these routes and provide customers of Virgin Australia and Qatar Airways with more international flight options.”
The commission signaled its approval of the agreement in February and allowed the airlines to promote new Australia-Qatar flights starting in November 2024.
There were objections to the alliance, with concerns that the deal could threaten Australian aviation jobs.
“We do not anticipate that Virgin Australia or any other Australian airline would independently operate Australia-Doha services in the next five years, even if the partnership was not approved,” Brakey explained.
“Thus, we do not foresee a significant negative impact on the Australian aviation workforce.”
Qatar CEO Badr Mohammed Al-Meer remarked that the decision demonstrates a desire for increased competition in the industry.
“I want to express gratitude to our colleagues at Virgin Australia and valued stakeholders for their dedication to our shared goal of fostering healthy competition in the local aviation market,” Al-Meer added.
The regulator noted that Virgin’s agreements with other airlines for services to Europe, the Middle East, and Africa will remain unaffected.
The approval comes over two years after the Australian government rejected Qatar Airways’ request to operate an additional 21 weekly flights to Australia, citing potential issues for local carrier Qantas.
This decision and Qantas’s influence on government decisions were examined during a Senate inquiry into air service agreements in 2023.
