By Jessica Yun
Virgin Australia chief Jayne Hrdlicka has rubbished Qantas boss Alan Joyce’s claims that Qatar Airways’ application to fly extra international services would have created market distortion, arguing that the extra seats would have brought down the prices of airfares.
In a two-hour grilling from the Senate committee on the cost-of-living crisis on Monday, Joyce defended the government’s decision to reject Qatar Airways’ application, which would have added 800,000 to 1 million additional seats between Australia, Doha and Europe each year.
Virgin Australia chief executive Jayne Hrdlicka has rubbished Qantas chief Alan Joyce’s claims of market distortion.
Joyce said Qantas made a submission to the federal government last October that Qatar Airways doubling its services would “distort the market” by hurting the recovering capacity of other airlines.
But Hrdlicka on Tuesday said that adding additional seats would push down sky-high overseas airfares, in turn increasing demand for international travel.
Virgin has a codeshare partnership with Qatar Airways, which means it would have profited from the additional bilateral air rights. Virgin’s market share on the Australia, Europe and Middle East routes would have risen from 25 per cent to 27 per cent.
Rival Qantas, which has the same codeshare arrangement with Emirates, sits at 43 per cent across those routes.
“The reality is, that many of those airlines that provided those seats pre-COVID won’t recover that capacity back into Australia, those seats won’t come back,” Hrdlicka told ABC’s RN Breakfast program.
“It’s really important that we take advantage of every opportunity to get more seats into and out of Australia as fast as we possibly can.”
The Virgin boss also refuted Joyce’s assertion that Qatar Airways could fly bigger aircraft to smaller cities, like Adelaide and Darwin, if it really wanted to boost seat capacity in Australia.
“The constraints are in these major capital cities, and so it’s a bit of an obfuscation to say ‘oh, fly into places where we don’t have enough people in Australia to support those seats’,” Hrdlicka said.
Additional seats need to be added to the major capital cities of Sydney, Melbourne and Brisbane, where the volume of demand is, she added.
“It’s also a bit of a nonsense to say it’s a market distortion when there’s such little capacity that’s recovered, and Qantas and Emirates together as partners have roughly 45 per cent share to Europe over the Middle East.
“Qatar today has 23 per cent, and it would add maybe 2 per cent share to their total capacity between here and Europe by adding these additional services. So, there’s no market distortion that can be argued as a reason not to add Qatar’s flights.”
Transport Minister Catherine King’s decision to reject Qatar’s bid has been criticised by key figures from the aviation and tourism sectors – including Sydney Airport’s outgoing chief and Flight Centre boss Graham ‘Skroo’ Turner – who say the federal government has failed to clarify why the application was rejected on “national interest” grounds.
Alan Joyce has faced hostile questioning at a Senate inquiry.Credit: John Shakespeare
Prime Minister Anthony Albanese on Tuesday defended King’s decision, describing it as “business as usual”. “There’s nothing unusual about air services agreements that are agreements which are country to country,” Albanese told ABC radio in WA.
“When I was transport minister, there were a range of proposals put forward that weren’t agreed to because ministers need to make the assessments at the time.”
Assistant minister for competition Andrew Leigh has also come to King’s defence. Speaking at the National Press Club on Tuesday, Leigh played a straight bat when pressed on the definition of “national interest”.
“There was no single decisive factor, she [King] made it in the national interest. I don’t have anything to add to that,” he said.
However, the Labor frontbencher added that he hoped to see greater competition in the aviation sector to drive down airfares.
“I would hope to see more airline competition in Australia,” he said.
“I look to Europe with its range of low-cost carriers and see what looks like an even more competitive ecosystem. So moving us ... towards that, I think, is a long-term goal.”
With Amelia McGuire
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