Virgin pushing ACCC for quick decision on extra Qatar Airways’ flights due to take off in June

Virgin Australia has asked the competition watchdog to fast-track its decision on a deeper relationship with Qatar Airways, so more flights to Doha can get underway from June.

Virgin Australia has asked the competition watchdog to fast-track its decision on a deeper relationship with Qatar Airways, so more flights to Doha can get underway from June.

Under the proposed arrangement, Qatar will take a 25 per cent stake in Virgin Australia and operate an additional 28 flights a week from Sydney, Melbourne, Brisbane and Perth as a “wet lease”.

The term wet lease is used when one airline uses its own aircraft and crew to operate flights on behalf of another carrier, which markets and sells the services as its own.

In an extensive application to the Australian Competition and Consumer Commission, Virgin Australia said a decision was needed by November so it could get started on selling the Qatar-operated flights and take advantage of peak season demand.

“If Virgin Australia is required to delay the launch and forward selling of the new services, it will lose the opportunity to make the most of these high seasonal demand windows to attract customers,” the application said.

“If the applicants cannot commence flying by June, it would not be financially viable to launch the first flight until December 2025.”

It said the public benefits of the Qatar-operated Virgin flights included “greater choice and schedule flexibility”, “improved connectivity and convenience” and “increased capacity resulting in lower airfares”.

Virgin Australia and Qatar have been partners since 2022.

The application said compared to 2019, ticket prices for flights between Australia and Europe had increased 41 per cent on average, and 56 per cent on services between Australia and the Middle East.

“Higher airfares have dampened the recovery of inbound international visitors into Australia,” Virgin Australia said.

“Prior to the Covid pandemic, short-term international visitors were steadily increasing each year. However as of June 2024, the number of short-term visitor arrivals to Australia was just 74.4 per cent of pre-Covid.”

Virgin Australia was also hopeful the partnership would lead to “opportunities for deeper co-operation” including the development of new routes.

Examples given included Doha to Western Sydney, Canberra and Darwin, and additional frequencies across Europe.

The application said international flights were “vital to the attractiveness of Virgin Australia’s brand, its Velocity loyalty program and the broader domestic business”.

“Qantas’ recent introduction of ‘Classic Plus’ which will increase members’ access to reward seats means that it is even more important for Virgin Australia to continuously improve its loyalty offering, including through more opportunities to redeem on international flights.”

The potential to attract more corporate customers was another perceived benefit of the deal, with Virgin Australia currently hamstrung by a lack of long-haul international services that “customers would prefer”.

“The proposed conduct would therefore provide an opportunity for Virgin Australia to expand its business by being able to compete more effectively for these corporate customers,” the application said.

The ACCC invited submissions to the proposed conduct by October 31, ahead of an “interim authorisation” to be issued in November, as requested by Virgin.

A final determination is not expected until March 2025.

Virgin Australia is also awaiting a decision by the Foreign Investment Review Board in relation to the sale of a 25 per cent stake in the carrier to Qatar Airways for an undisclosed sum.