FedEx signs new freight deal with Qantas instead of Virgin Australia

Qantas’ freight business has secured a new deal with a major shipping service that used to hold the agreement with rival airline Virgin Australia.

Qantas has a signed a new deal with global courier service FedEx Express to distribute all its domestic freight needs for the next six years.

The deal is a major financial blow to rival airline Virgin Australia, which used to hold the freight agreement with the recently merged FedEx and TNT freight company.

FedEx’s agreement with Qantas Freight is expected to generate more than $350m in revenue over the life of the contract.

The major airline’s freight business has been the most resilient division during the coronavirus pandemic that has grounded the majority of the airline’s domestic and international commercial travel flights.

FedEx is the largest express shipping and freight company in the world.

The major airline’s freight business has been the most resilient division during the pandemic. Picture: Matt Jelonek/ Getty Images

The major airline will support FedEx in maintaining domestic business-to-business freight volumes across key industries such as mining, construction and medical supplies.

Qantas Freight executive Catriona Larritt said the new agreement coincided with heightened demand for freight services while the global lockdown endured.

“Qantas has had a longstanding relationship with FedEx and TNT in Australia,” Ms Larritt said.

“As FedEx and TNT come together in Australia, our extended agreement will help meet continued demand. Together, we will work to ensure we meet the needs of customers now and into the future.”

FedEx Express Australasia vice-president Peter Langley said the long-term agreement would ensure the courier company had reliable access within Australia and the broader region.

“This agreement will enable FedEx and TNT to continue meeting Australia’s intensifying demand for freight, particularly while passenger aircraft belly space capacity remains constrained due to COVID-19,” Mr Langley said.

FedEx is the largest express shipping and freight company in the world. Picture: Handout / FedEX / AFP

“We are actively counselling and working with small, medium and large businesses in Australasia to support their growing demand – especially in the wake of accelerated e-commerce and online shopping.”

Qantas also said it recorded the second largest spike in registrations for its frequent flyer status match on the same day Virgin announced it would match airline points for new Velocity customers coming from other airline loyalty programs.

Qantas registrations rose 197 per cent compared to the day before. The airline also said bookings using points were running at twice the rate of this time last year.

It is understood the majority of the new Qantas frequent flyer members are coming from Virgin’s Velocity program.

Friday is the last day people will be able to obtain Qantas’ status match that allows a traveller to retain their existing points balance from another airline.

Originally published as FedEx signs new freight deal with Qantas instead of Virgin Australia