ACCC gives okay to new Qatar Airways flights for Virgin Australia due to start in June
The Brisbane-based airline’s plan to operate new flights with partner Qatar Airways has cleared a major hurdle, with a couple more to go.
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Treasurer Jim Chalmers is all that stands between Virgin Australia and a deeper partnership with Qatar Airways after the competition watchdog gave preliminary approval for more flights to Doha from June.
The Australian Competition and Consumer Commission’s draft determination found the flights to be operated by Qatar on Virgin’s behalf would likely result in public benefits including increased choice of services, additional connectivity, convenience and loyalty program gains.
They were unlikely to result in any public detriment, and there was no circumvention of the Australia-Qatar bilateral rights agreement, the ACCC said.
Virgin Australia was quick to welcome the decision which provides a strong indication the watchdog will grant final approval in March or April, after taking further submissions.
A Virgin spokesman said the partnership with Qatar Airways would deliver significant benefits not only to travellers, but to the Australian economy as well.
“This includes tourism, job creation and better freight export options,” he said.
As well as the final decision by the ACCC, Virgin Australia still needs the nod from the Foreign Investment Review Board, overseen by Dr Chalmers.
It is understood the flights are contingent on Qatar Airways taking a 25 per cent stake in Virgin Australia, which is currently being examined by the FIRB.
In the event an election is called before a decision is delivered, Virgin may be forced to delay the flights to December.
Dr Chalmers said on Tuesday that he was yet to receive the FIRB’s advice on Virgin-Qatar.
“I would be very, very surprised if I couldn’t make a decision on that before the election,” he said.
The ACCC determination forms part of the FIRB’s considerations, along with advice from the Australian Taxation Office, Department of Foreign Affairs and Austrade.
In 2023, the government decided increasing Qatar Airways’ bilateral air rights to Australia was not in the national interest, but failed to go into detail as to why. It is believed the decision was made after lobbying by Qantas, which argued more flights by Qatar would disadvantage the flying kangaroo and other airlines as they rebuilt after Covid.
Transport Minister Catherine King also alluded to an incident at Hamad International Airport in 2020, in which female passengers were marched off Qatar flights at gunpoint and subjected to invasive internal examinations.
A number of Australian women were among those assaulted, as airport security searched for the mother of a newborn baby found dumped in a rubbish bin.
The rejection of Qatar’s application was met with widespread outrage from tourism groups, airports and travel agents, many of whom were quick to welcome the ACCC’s draft determination on Tuesday.
Flight Centre corporate chief operating officer Melissa Elf said more flights to Doha and on to Europe and Africa would bolster choice and affordability for Australian travellers.
“These extra flights will certainly have an impact on international travel out of Australia, particularly to Europe which has generally been slower to return to pre-pandemic capacity and has seen higher airfares as a result,” she said.
“A strong and competitive airline industry is good for everyone, so we’re confident this will mean cheaper fares and more travel destinations for Australians from mid-year.”
The Australian Airports Association described the deal as a “crucial opportunity” to improve airline competition, capacity and jobs creation.
AAA chief executive Simon Westaway said the ACCC’s airline monitoring report, also published on Tuesday, highlighted the need for more flights.
“We look forward to the federal government’s prompt approval process for this alliance,” he said.
Accommodation Australia CEO James Goodwin said he was excited at the prospect of more inbound tourists to fill hotel rooms, and stimulate the visitor economy.
“Additional airline access should lead to cheaper airfares, bringing in more travellers and meaning more Australian jobs in the accommodation and hospitality sectors,” he said.
The Transport Workers Union was also pleased with the ACCC’s decision, saying it would help the stability of Virgin into the future and lead to opportunities for workers.
But TWU national secretary Michael Kaine said there were still several uncertainties facing Virgin, including the approval of the 25 per cent Qatar stake, and a successor for CEO Jayne Hrdlicka.
Frontrunner Paul Jones recently withdrew from the race after pressure from the TWU and Employment Minister Murray Watt, over his role in the Qantas illegal outsourcing scandal.
The union had warned Virgin it would pull support for the Qatar tie-up if Mr Jones was appointed CEO, with Ms Hrdlicka expected to exit the airline this year.
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