VIRGIN AUSTRALIA: Alliance with Qatar Airways gets interim approval from ACCC

The Australian Competition and Consumer Commission (ACCC) has granted interim authorisation for a collaborative venture between Virgin Australia and Qatar Airways. Virgin Australia has applied to cooperate with Qatar Airways in an integrated alliance.

Tickets on sale soon

This decision allows the two carriers to begin marketing and selling 28 weekly return flights between Doha and major Australian cities including Brisbane, Melbourne, Perth, and Sydney.

This development expands Qatar Airways’ existing international services. It also allows Virgin Australia to prepare for the launch of its new Australia-Doha services from Sydney, Melbourne, and Brisbane, commencing in June 2025. Perth will follow in November 2025. The ACCC’s interim authorisation should provide both airlines with the necessary lead time for planning, marketing, and system alignment.

“Granting interim authorisation now will allow Qatar Airways and Virgin Australia the lead time to undertake the necessary planning discussions, marketing, selling, and system alignment in preparation for Virgin Australia to commence flying the new services by June 2025.”

Mick Keogh, ACCC Deputy Chair

The Flight frequencies

As from June 2025, or in the case of Perth from November 2025, flight frequencies by Qatar/Virgin Australia will look like this:

• Sydney-Doha Two daily flights, a doubling of frequency
• Melbourne-Doha Three daily flights, an increase from two. One of those flights is currently via Adelaide.
• Brisbane-Doha Two daily flights, a doubling of frequency
• Perth-Doha Two daily flights from November 2025 (Qatar is waiting to have long range aircraft available)

A few more steps

The new services are contingent upon final regulatory approval from the ACCC and other government bodies, including the Foreign Investment Review Board, which needs to OK Qatar Airways’ purchase of a 25% stake in Virgin Australia.

Customers will get refunds if the deal falls over

To safeguard customers, the ACCC has accepted a court-enforceable undertaking from the airlines. Should final approval not be granted, affected customers will be offered refunds or alternative flights at no additional cost, ensuring they are not financially disadvantaged.

“Having this court-enforceable undertaking that protects customers was important to our decision to allow Virgin Australia and Qatar Airways to start selling tickets now.”

Mick Keogh, ACCC Deputy Chair

Draft determination due in Februayr 2025

The ACCC has yet to reach a final decision on the authorisation application. It is still weighing the public benefits against any potential detriments.

The alliance aims to enhance products and services, including increased flight capacity to and from Qatar and major Australian cities.

Flying to Doha will give Virgin passengers access to the extensive international network of Qatar Airways, especially into Europe. Expect a draft determination in February 2025.

Interim approval deal details

Under the interim approval of proposed arrangements, Virgin Australia plans to use Qatar Airways’ aircraft and crew. This ‘wet-lease’ arrangement effectively allows Virgin Australia to use Qatar Airways as its international division.

The deal also gives Qatar Airways additional access to Australian capital cities, which the government denied in 2023.

For passengers, this deal will, to all intents and purposes, be the same as if Australia had granted Qatar Airways additional landing slots in its preferred Australian Capital cities of Brisbane, Melbourne, and Sydney.

The ACCC is still considering concerns about the tie-up between the airlines and the deal’s exclusivity.

Loyalty

The Qatar Airways deal was thought to affect Virgin’s partnership agreements with other airlines. Apparently, Etihad and South African Airways will be the only casualties.

Virgin Australia’s loyalty program, Velocity, will continue to allow members to earn and redeem points on Singapore Airlines-operated services globally. The airline’s partnerships with South African Airways and Virgin Atlantic remain unchanged.

The ACCC’s interim authorisation provides statutory protection from legal action under the Competition and Consumer Act for the five-year period applied for.

2PAXfly Takeout

Virgin Australia and Qatar should be happy. They are both one step closer to getting what the want.

For Virgin Australia it builds an international network without the tiresome recruitment of staff and pilots and the spectacular amounts of capital investment in aircraft and engineering. For Qatar, they are closer to getting the access to the Australian market that they have wanted for a few years. Effectively it will double their presence in Australia.

In the immediate term, this is going to be great for Australian travellers, adding a huge number of seats between Australia and the Middle East and onward to the rest of the world, thanks to Qatar Airways. In the longer term, it is anti-competitive, which is why Virgin has applied for approval from the ACCC. Potentially, it will stop additional competitors coming into the Australian market.

For now, I hope this interim approval indicates the process continues forward, with final approvals from the ACCE and FIRB in 2025, so we can access the flights from June.