Qatar Airways to acquire 25% of Virgin Australia

[Melburnian1]

How Qatar outmanoeuvred Qantas on international flights

After Qantas successfully lobbied against extra Qatar Airways flights, the Middle Eastern airline has exacted revenge on the Flying Kangaroo with a deal that will increase competition and possibly result in cheaper fares.

www.abc.net.au

Some additional media coverage has came out this morning.

"Their ABC" ought stop referring to SYDTAS as 'the national carrier'.

As noted above, almost 75 per cent of passengers on Oz-bound or commencing international flight use non-QF Group carriers.

 

[justinbrett]

"Their ABC" ought stop referring to SYDTAS as 'the national carrier'.

As noted above, almost 75 per cent of passengers on Oz-bound or commencing international flight use non-QF Group carriers.

So what you’re saying is QF manages a 28% marketshare despite having 57 competitors? Almost triple the next closest competitor, SQ at 9.4%

Well when you put it like that, it’s rather impressive! Thanks for pointing that out.

Then again, why are we talking about QF?

 

[elanshin]

One of the biggest things that will determine and set the tone is if QR will leave the current VA SQ agreements alone or if they'll ask for amendments.

I hope that they leave it alone, but if they do mess with it, I wouldn't even be sure if this would be beneficial for VA. Would rather have SQ as a partner than QR by a long mile.

 

[TheInsider]

One of the biggest things that will determine and set the tone is if QR will leave the current VA SQ agreements alone or if they'll ask for amendments.

I hope that they leave it alone, but if they do mess with it, I wouldn't even be sure if this would be beneficial for VA. Would rather have SQ as a partner than QR by a long mile.

I believe QR wants to do best for QR, I really don't think they care about the other partners and will eventually want all that traffic, especially SQ's EU traffic. I can't see many of these extra 'partners' lasting too much longer.

 

[downtheback]

Gov might approve the buyout, but no way Virgin is allowed to wet lease those planes (long-term at least). Whilst an internation entity can run and own a domestic airline, any international airline needs to be australian domiciled. Qatar wet leasing to circumnavigate bi-laterals will come right up against this.

Don't they say "if you find it 10percent cheaper then we will refund" or something like that?

Wonder if Qantas would ever say that......,

Bunnings only price matches on the same item including #/weight/size etc. Funnily enough, bunnings seems to stock most items in exlcusive sizes that competitors don't get, rendering this mostly useless.

 

[justinbrett]

One of the biggest things that will determine and set the tone is if QR will leave the current VA SQ agreements alone or if they'll ask for amendments.

I hope that they leave it alone, but if they do mess with it, I wouldn't even be sure if this would be beneficial for VA. Would rather have SQ as a partner than QR by a long mile.

It’s easily fixed with geographic restrictions (ie Asia only for SQ, no Asia / Americas for QR) which is how QF/EK do it.

The current ACCC codeshare approval for VA doesn’t permit overlapping routes, so really nothing can be taken for granted, especially as QR already has a JV approved with BA/IB. I can’t see that becoming a foursome. QR may have to break away.

 

[Human]

I believe QR wants to do best for QR

Well, any company hopefully wants to do what's best for itself. In Australia that's a legal obligation, more or less.

But if it owns a part of VA, that means it will want a profitable, attractive and viable VA. One of the pillars of that at the moment is the SQ alliance. And remember that QR obviously can't match SQ's reach into Asia.

Companies have made stupider mistakes, but it would seriously undermine the value and attractiveness of VA and Velocity in particular, and therefore VA's profitability, if Qatar went down that road.

 

[elanshin]

I believe QR wants to do best for QR, I really don't think they care about the other partners and will eventually want all that traffic, especially SQ's EU traffic. I can't see many of these extra 'partners' lasting too much longer.

It’s easily fixed with geographic restrictions (ie Asia only for SQ, no Asia / Americas for QR) which is how QF/EK do it.

The current ACCC codeshare approval for VA doesn’t permit overlapping routes, so really nothing can be taken for granted, especially as QR already has a JV approved with BA/IB. I can’t see that becoming a foursome. QR may have to break away.

Which would put the whole thing in a conundrum if people start just transferring VFF to KF and booking on SQ. Then what? stop the transfer and kill one of the most lucrative aspect of VFF?

Losing SQ for QR is a net negative overall given our geographical location.

 

[p--and--t]

Then again, why are we talking about QF?

Many cant help themselves being obsessed OT with regular criticism

 

[ben95]

but no way Virgin is allowed to wet lease those planes (long-term at least).

I can see the government to require that after X years VA will have Australian based pilot and crew operate “VA controlled” aircraft will be a condition and should be acceptable to Bain/VA. Ultimately I think this wet lease to get started then after X years transition to VA controlled operation within a JV setting is the best bet to have a viable 2nd international airline flying out of Australia.

In the long term that’s good for consumers as those being VA controlled aircraft can incentivize VA to expand into other international markets. It’s also good for the sector meaning more opportunities for pilots, crews and engineering positions. In the short term that does mean QR is probably profiting more from the wet lease arrangement compared to a typical JV where VA does its own flying but I think putting a time on it will give the business an opportunity to give this a go.