Business laments loss of $788m due to controversial Qatar Airways decision

Canberra’s decision to block Qatar operating more flights here could potentially cost the tourism industry $788m a year, the Australian Chamber of Commerce and Industry says.

A key business group has weighed into the debate over the government’s decision to block Qatar Airways from operating more flights into Australia, saying the move would cost the tourism industry an estimated $788m a year.

In a letter to Transport Minister Catherine King, Australian Chamber of Commerce and Industry tourism chair John Hart said more international flights would help operators rebuild after years of crippling Covid-19 restrictions.

He said the growth of Australian tourism was a function of inbound and outbound air capacity, and any limitations on capacity stunted growth not only through seat numbers but fare competitiveness.

“ACCI acknowledges the government’s role in approving applications, however, members are concerned that the decision will have long-term impacts on the tourism sector in a number of ways,” wrote Mr Hart in the letter seen by The Australian.

“For example, if this decision sets a precedent for consideration of future applications from other airlines, being that requests for additional flights will not be granted, the loss to the tourism industry will be grave.”

An additional four flights a day by Qatar Airways could potentially inject $788m into the visitor economy, he said.

“We would be grateful for the chance to meet with you to explain our concerns and detail the impacts of the decision on the tourism industry,” Mr Hart wrote.

Virgin Australia also stepped up its opposition to the decision and CEO Jayne Hrdlicka added her voice to the outcry.

Qatar Airways and Virgin Australia teamed up last year.

The airline partnered with Qatar Airways last year in a deal designed to benefit both carriers and give Velocity frequent flyers he opportunity to use points on long-haul flights.

Ms Hrdlicka’s statement came after Virgin’s head of corporate affairs and sustainability told a Senate committee hearing on Monday that the ruling against Qatar was “deeply regrettable”.

“International airfares today are nearly 50 per cent higher than pre-Covid,” Ms Hrdlicka said.

“Additional Qatar flights would have an immediate and tangible effect in reducing airfares between Australia and Europe, the Middle East and Africa.

“Qatar is in the unique position in the context of a constrained global supply of widebody aircraft, to be able to quickly make available four additional services a day to Australia.”

Ms Hrdlicka said she looked forward to “working with the federal government and other key stakeholders to find a way to understand and resolve the underlying issues”.

Qatar currently operated a mix of Boeing 777s and A380s on Australian routes, and could increase capacity by 27 per cent upgauging to all A380s, Qantas suggested.

The flying kangaroo has defended the government’s decision over Qatar Airways, suggesting the reaction was overstating the importance of an extra 28 flights a week.

Qantas International chief executive Cam Wallace said a number of other airlines, including Singapore and Cathay, were increasing capacity to Australia by more than what Qatar wanted to.

Qantas opposed Qatar’s application for more flights, which appeared to have helped sway the government’s decision.

Earlier this month, Ms King told parliament “it was not in the national interest” to grant Qatar Airways more traffic rights but would not elaborate further.

Qatar Airways is yet to comment on the decision.

Originally published as Business laments loss of $788m due to controversial Qatar Airways decision