Qatar Airways to acquire 25% of Virgin Australia

[Saab34]

There is many aussies working in airline management for QR or others in the ME.

I just think the whole Paul Jones rumour, might have turned sour with the QF dramas that he was involved in, perhaps also QR are not fond of the way QF Management ‘does things’ so want someone else. The Unions blasting PJ also when his appointment was rumoured won’t help his image either.

I do agree it probably needs to be an Australian or someone with local market knowledge.

 

[downtheback]

Except maybe to look after the interests of its flying consumers by promoting competition rather than being protectionist. If other nations did that, we'd be the loser.

What does Australia gain from giving Qatar more flight rights? Is Qatar going to give Australia anything in return? I'll expand on this later...

AU-EU has plenty of competition via ME, Asia and now non-stop. Prices out of covid were stupid because demand went from 0 to 100, and supply couldn't keep up. Prices for next year are already lower than this year and well below 2022. Supply is catching up, and didn't require QR getting any flights

That's fair comment, but it begs the question about regarding other nations in a similar way. The UAE (nor Qatar) isn't exactly a nice place for gays and even Australia is castigated here and in overseas forums for its treatment of Aboriginal people and refugees. Twenty-two states of the USA has the death penalty for children, including Texas (who has actually done it) - a significant hub for Australians flying to and from the USA.

As awful as the incident at DOH was, the one-off incident seems to draw some disproportionate opprobrium when it comes to judging countries suitable for airlines operating into Australia. Doesn't matter if its a state airline or not.

I said it was the most prominent example that the general public was aware of. I wasn't make any other claims. It would have only played a very small part in the actual decisoin (but amplified for the optics).

My main comment was surrounding trade between the two countries which you skipped entirely. Australia gives Singapore open skies, because in return Singapore imports a megaton of fresh produce including meat and dairy from Australia. The US gets open skies, because its part of a broader strategy surrounding defence and economic ties. Same goes for China.

The right to fly into Australia has value, this often gets missed. By letting Qatar fly more into Australia (MEL/SYD/BNE/PER), we are giving something of value to Qatar. What are they giving us back? Competition is not a valid answer. Are they going to import our products? Are they going to lower tarrifs? Give us cheaper oil? Clearly Australia is valuable enough that QR wants to buy (some of) VA, so if that's the case, why can't their Gov come to the table and offer something valuable in return for flight rights?

 

[drron]

You are forgetting natural gas. The worlds largest exporter of LNG by ship is the USA closely followed by Qatar and Australia. They are all well ahead of any other nation exporting by ship.
So if Australia really annoys Qatar then there is the possibility of price manipulation which would certainly hurt Australia.

 

[Human]

Competition is not a valid answer.

Could you elaborate on why competition is not a valid answer? I'm not an economist, but I've heard plenty speak of the value of competition and how it contibutes to prosperity and wealth (both at a personal and a national level).

So if competition is increased, is that not a benefit and, therefore, something that Qatar is "giving us back"?

If your argument is that prices are lower than before and so more competition is unnecessary, what's the problem with more competition driving prices lower still?

Like I say I'm not an economist so these are genuine questions.

 

[RooFlyer]

My main comment was surrounding trade between the two countries which you skipped entirely. Australia gives Singapore open skies, because in return Singapore imports a megaton of fresh produce including meat and dairy from Australia. The US gets open skies, because its part of a broader strategy surrounding defence and economic ties. Same goes for China.

Yes, you put a lot emphasis on trade factor, but I don't, which is why I skipped it. I'm not so sure that aviation rights are so firmly linked to other trade, defence etc; but how 'nice' the country is to Australia generally I'm sure will come into it. 'Open Skies' is more about mutual willingness to grant reciprocity.

But if you want to look at trade and other ties between Qatar and Australia, have a look at DFAT's summary:

Qatar country brief

The State of Qatar occupies an 11,600 square kilometre peninsula on the northeast coast of the Arabian Peninsula.

www.dfat.gov.au

What are they giving us back? Competition is not a valid answer.

Why on earth not ? Cheaper anything comes with more competition. Aus-Europe is a huge (and pretty expensive) aviation market for the public and more flights will inevitably result in lower prices. In allowing more QR (or VA/QR) flights, 'Qatar' is giving the travelling public more choice and it must have an effect on cost. If QR can offer lower prices (or even similar prices with a high quality product) because of the Qatari state is behind it, as a traveller, I don't care.

Are they going to import our products? Are they going to lower tarrifs? Give us cheaper oil? Clearly Australia is valuable enough that QR wants to buy (some of) VA, so if that's the case, why can't their Gov come to the table and offer something valuable in return for flight rights?

Again, have a look at the DFAT summary above.

That said, I think the 'trade-off' you talk about here might be the significant investment in cash and IP in what has been a struggling airline. Yes, its going to Bain now, but ultimately they will be a shareholder in the listed company and a second domestic airline can only be stronger with a major global airline behind it. And before anyone says it, the previous 3-way major airline shareholder situation cannot be compared. I mean, three large competitors with influence on a small airline - what could possibly go wrong?

 

[ben95]

Qatari state is behind it, as a traveller, I don't care.

Wait do you mean if us travelers get a good deal on a great product potentially the Qatari state is subsidizing it with oil money? Count me in on those subsidy please!

 

[andye]

Is Privilege Club a viable program for earning status and points for Australian fliers? Compared to Velocity and QFF?

Not really
Domestic QF/VA don't earn unless part of a QR connection
For a regular J international flyer at least 50% harder than QF(on QF) or BA to get OWS/OWE (about the same as CX) though doesn't have the QF problem of reduced SC earn on other OW carriers

 

[airlinemn]

I suspect they will want tickets to be open for sale shortly for the upcoming EU summer.

I also suspect this will be closer to 3-4x daily flights once it is fully up and running. Emirates must be shaking in its boots.

 

[Mr Bill]

I understand how easy it is for the "knockers" to take a shot at QR. However, let's not forget that during the height of the covid crisis, QR was the only airline (incl QF) providing a consistent service into Australia from Europe and the ME. I also understand that the OZ Govt is in talks with QR (and QF) to assist with the evacuation and repatriation of Australian citizens/residents from the troubles in Lebanon. Surely common sense commercial decisions for QR.

 

[p--and--t]

Could you elaborate on why competition is not a valid answer? I'm not an economist, but I've heard plenty speak of the value of competition and how it contibutes to prosperity and wealth (both at a personal and a national level).

So if competition is increased, is that not a benefit and, therefore, something that Qatar is "giving us back"?

If your argument is that prices are lower than before and so more competition is unnecessary, what's the problem with more competition driving prices lower still?

Like I say I'm not an economist so these are genuine questions.

We can (and have) increased competition by allowing TK in, SG & CX and TG ramping back up to pre covid levels among other actions.

There is no need from a national perspective to grant extra flights to specific preferred ports to an airline that tried to bully it's way to extra flights and tried to bypass due process which is a gov-gov interaction, not airline to media action.

As I understand it, QR could very easily get more seats into AU by up scaling aircraft on existing routes or flying to ports they already have access to but choose not to service. (Or buy into VA)

 

[Human]

There is no need from a national perspective to grant extra flights to specific preferred ports to and airline that tried to bully it's way to extra flights and tried to bypass due process which is a gov-gov interaction, not airline to media action

I think, reading between the lines, you're no fan of QR then? I do seriously wonder, though, if we were to compile a list of airlines flying in, or to, Australia, that have been guilty of some sort of bullying behaviour in the past, is there any airline that would not make the list? More to the point is Qatar's alleged bullying a sufficient reason for this major intervention in VA's business?

More seriously: in a free market economy, could we not turn your question around and ask whether there is a "need from a national perspective" to not grant the extra flights? I'm not necessarily a believer in small government, but I do believe that governments should not intervene unnecessarily!

So the question remains: whether or not we agree with it or like QR, is it necessary for the government to refuse QR/Virgin's proposed course of action?

 

[p--and--t]

I think, reading between the lines, you're no fan of QR then? I do seriously wonder, though, if we were to compile a list of airlines flying in, or to, Australia, that have been guilty of some sort of bullying behaviour in the past, is there any airline that would not make the list? More to the point is Qatar's alleged bullying a sufficient reason for this major intervention in VA's business?

More seriously: in a free market economy, could we not turn your question around and ask whether there is a "need from a national perspective" to not grant the extra flights? I'm not necessarily a believer in small government, but I do believe that governments should not intervene unnecessarily!

So the question remains: whether or not we agree with it or like QR, is it necessary for the government to refuse QR/Virgin's proposed course of action?

It is dangerous to make assumptions. I love the QR J Suites and flown them a number of times and will do so in the future.

Because they have a good product is irrelevant to the gov's decision making and what is in the national interest.

Flights between countries are by intergovernmental agreement for strategic reasons of the gov's of the day not by an airline launching a media blitz that left out a number of inconvenient but relevant facts.

 

[Human]

It is dangerous to make assumptions. I love the QR J Suites and flown them a number of times and will do so in the future

I apologise unreservedly for making assumptions!

Flights between countries are by intergovernmental agreement for strategic reasons of the gov's of the day not by an airline launching a media blitz that conveniently left out a number of relevant facts

Fair enough. Maybe we will have to disagree on what facts are "relevant" or not, though.

 

[dapianoman]

We can (and have) increased competition by allowing TK in, SG & CX and TG ramping back up to pre covid levels among other actions.

There is no need from a national perspective to grant extra flights to specific preferred ports to an airline that tried to bully it's way to extra flights and tried to bypass due process which is a gov-gov interaction, not airline to media action.

As I understand it, QR could very easily get more seats into AU by up scaling aircraft on existing routes or flying to ports they already have access to but choose not to service. (Or buy into VA)

I think it's pretty clear by this announcement that the extra flights would allow connections to a lot more destinations than is currently possible now. To just say putting on larger aircraft is the solution ignores the fact that the current times don't connect to QR's full European/African network and changing a 777 to an A380 won't change that. Extra flights will automatically attract new customers that will want to fly to the new destinations available to them with the added connections.

Also, I think it's pretty obvious why they don't put on flights to secondary cities. It's an uncompetitive choice when going against other airlines that can fly into the major hubs multiple times per day. There's not just a smaller catchment population but there's less connecting flights coming in for regional people to connect to. Let's look at the Gold Coast for example: More of Qld's population is outside of SE Qld than in it, but yet they don't have flights direct to the Gold Coast, but they can fly direct to Brisbane. So it makes no sense from a business sense to fly to OOL in terms of maximising potential Qld customers.

 

[p--and--t]

I think it's pretty clear by this announcement that the extra flights would allow connections to a lot more destinations than is currently possible now. To just say putting on larger aircraft is the solution ignores the fact that the current times don't connect to QR's full European/African network and changing a 777 to an A380 won't change that. Extra flights will automatically attract new customers that will want to fly to the new destinations available to them with the added connections.

Also, I think it's pretty obvious why they don't put on flights to secondary cities. It's an uncompetitive choice when going against other airlines that can fly into the major hubs multiple times per day. There's not just a smaller catchment population but there's less connecting flights coming in for regional people to connect to. Let's look at the Gold Coast for example: More of Qld's population is outside of SE Qld than in it, but yet they don't have flights direct to the Gold Coast, but they can fly direct to Brisbane. So it makes no sense from a business sense to fly to OOL in terms of maximising potential Qld customers.

Agreed. But that's the airlines perspective.

That doesn't always along with the respective gov's perspective nor factors that one airline is unaware of (and doesn't care about)

And do you feel TK won't introduce a myriad of new options not currently available to the travelling public and improved direct freight opportunities to a new country?

 

[Le_Champion]

Can't wait for QR to get more slots. Whether through the VA deal or through their own.

Great airline and our own QF needs competition

 

[dapianoman]

Agreed. But that's the airlines perspective.

That doesn't always along with the respective gov's perspective nor factors that one airline is unaware of (and doesn't care about)

And do you feel TK won't introduce a myriad of new options not currently available to the travelling public and improved direct freight opportunities to a new country?

TK will bring about new options but why should they be preferenced over QR with regards to landing slots?

I believe in a free market economy (which we are supposed to have), it's the government's job to not favour one business over another and they should be fair to all, allowing the consumer to decide which business is best. I don't believe this has happened in QR's case. There is a clear bias against them, especially when other middle Eastern airlines are allowed more slots than QR.

 

[Human]

And do you feel TK won't introduce a myriad of new options not currently available to the travelling public and improved direct freight opportunities to a new country?

At the risk of sounding like a scratched record...

You're attempting to make a case (which I think is weak) regarding why it's not necessary that QR be allowed more flights.

That's very different from saying that it's necessary that they NOT be allowed more flights.

Are you saying that Qatar should be stopped and that the Government should deny VA's request?

 

[Captain Halliday]

an airline launching a media blitz that left out a number of inconvenient but relevant facts.

I can think of a few airlines that fit the description.