Virgin promises ‘more value, better options’ with Qatar Airways on board in major deal

Virgin Australia is promising better value and more options for travellers when Qatar Airways takes a 25 per cent stake in the airline.

Virgin Australia’s relationship with Qatar Airways is about to get much more serious. Picture: Virgin Australia.

Virgin Australia is promising “better value and better choices” for travellers if a major deal with Qatar Airways is green lit by the federal government.

Under the deal, which has been more than a year in the making, Qatar Airways will take a 25 per cent stake in Virgin plus a board seat, in return for more access to Australian ports.

Virgin Australia chief executive Jayne Hrdlicka said the investment by Qatar would significantly strengthen Virgin’s place in the Australian aviation market, allowing them to take up the fight to Qantas.

“In order to compete domestically you need to have the world’s best international network to provide to your guests,” Ms Hrdlicka said.

“We’re small in the grand scheme of players globally and we’re small in the grand scheme of players domestically and we need access to scale, and Qatar gives us that access.”

Although she would not promise cheaper airfares, Ms Hrdlicka said with Qatar behind them, Virgin Australia would be able to lower its cost base further.

“It means we’ve got the ability to think about procurement differently, the ability to get better pricing for important, very expensive aspects of our cost structure, the ability to work differently together with our airport partners,” she said.

“The goal here is for this to improve our ability to compete domestically and the ability to deliver even more value and better choices for our travellers.”

The arrangement would also see Virgin Australia return to long-haul international flying in a sense, with Qatar Airways providing aircraft and crew for more flights between Sydney, Melbourne, Brisbane, Perth and Doha.

Flight Centre travel group managing director James Kavanagh said the proposed investment by Qatar would “make Virgin Australia stronger and more competitive”.

“We believe this is further great news for travellers when international airfares are falling significantly in Australia, capa­city is increasing and airlines are innovating by introducing more direct services,” he said.

Qantas declined to comment on the Virgin-Qatar deal on Tuesday as it faced its own challenges from its domestic pilots.

Of the 786 pilots who voted on a new enterprise agreement, 63.4 per cent rejected the deal which included a two-year wage freeze. Australian Federation of Air Pilots director Simon Lutton said improvements in conditions were not enough to overcome the wage freeze.

Originally published as Virgin promises ‘more value, better options’ with Qatar Airways on board in major deal