Qatar Airways to acquire 25% of Virgin Australia

[simmomelb]

In their application to the ACCC, Virgin have requested interim authorisation for Doha flights by November 2024 with a June 2025 launch to coincide with the peak summer period.

They also state that if they cannot commence flying by June 2025, it would not be financially viable to start flights until December 2025 and the launch would be delayed to coincide with the December/January peak period.

Source: Virgin wants ACCC to greenlight Qatar wet-lease by next month

Some interesting parts in the application on the ACCC website, for those interested, in particular...

- Subject to certain exceptions outlined in Virgin Australia’s submission, Qatar Airways will become Virgin Australia’s exclusive interline, codeshare and loyalty partner headquartered in the Middle East or Türkiye and Virgin Australia will become Qatar Airways’ exclusive interline, codeshare and loyalty partner headquartered in Australia.

- The ability to share information to the extent necessary to facilitate the matters referred to above and to explore opportunities for deeper cooperation. This may include developing new routes.

Virgin Australia and Qatar Airways

Virgin Australia and Qatar Airways (the Applicants) seek authorisation to engage in cooperative conduct under an integrated alliance including:

www.accc.gov.au

 

[ozstamps]

The deal has been slammed by Qantas pilots’ union the Australian and International Pilots Association (AIPA), whose president Tony Lucas labelled it a “workaround of bilateral agreements” and of Australian jobs.

“The entire thing just feels like a bit of a sham arrangement. The government introduced closing loophole legislation to try to protect the rights of Australian workers and this just seems to be a loophole to get around those protections in favour of a foreign entity,” he said.

Qatar’s bid for 25 per cent of Virgin also requires approval from the Foreign Investment Review Board (FIRB).


Publicly trying to strong-arm the ACCC to make a decision 'next month' has a history of working for almost no applicants.

Virgin would have been most wise to roll out all their mega changes to Velocity AFTER all this Qatar aspiration was done and dusted - if it ever is, and that seems by no means guaranteed.

 

[simmomelb]

The deal has been slammed by Qantas pilots’ union the Australian and International Pilots Association (AIPA), whose president Tony Lucas labelled it a “workaround of bilateral agreements” and of Australian jobs.

“The entire thing just feels like a bit of a sham arrangement. The government introduced closing loophole legislation to try to protect the rights of Australian workers and this just seems to be a loophole to get around those protections in favour of a foreign entity,” he said.

Qatar’s bid for 25 per cent of Virgin also requires approval from the Foreign Investment Review Board (FIRB).


Publicly trying to strong-arm the ACCC to make a decision 'next month' has a history of working for almost no applicants.

Virgin would have been most wise to roll out all their mega changes to Velocity AFTER all this Qatar aspiration was done and dusted - if it ever is, and that seems by no means guaranteed.

Are you surprised that the Qantas pilots union has "slammed" this? lol
That is not something the ACCC even put into consideration AFAIK.
Agree that the ACCC won't listen to requests to make a decision next month, however, the ACCC has said is expects to announce this in November 2024.

Indicative date: November 2024
Stage in assessment process: ACCC decision regarding interim authorisation.

 

[ozstamps]

They are simply stating what ACCC will readily see - it is Qatar's clumsy back door tactic to double their flights to here after that was rejected publicly in recent times.

There is no Virgin staffing employment on the wet lease services - correct?

So the only loser can be Qantas.

All bonus bucks in the bank to Bain of course for the Qatar backs and even that 25% stake money does not stay in Australia, it goes right into Bain's wallet in the USA.

 

[Bagpuss]

Are you surprised that the Qantas pilots union has "slammed" this? lol
That is not something the ACCC even put into consideration AFAIK.
Agree that the ACCC won't listen to requests to make a decision next month, however, the ACCC has said is expects to announce this in November 2024.
Either way, they will make an interim decision when they are ready.

I'm pretty sure that there was some commentary that Virgin and Qatar were doing a lot of talks with relevant parties prior to making this public. True or not we will never know.

Time will tell.

 

[Bagpuss]

They are simply stating what ACCC will readily see - it is Qatar's clumsy back door tactic to double their flights to here after that was rejected publicly in recent times.

There is no Virgin staffing employment on the wet lease services - correct?

So the only loser can be Qantas.

All bonus bucks in the bank to Bain of course for the Qatar backs and even that 25% stake money does not stay in Australia, it goes right into Bain's wallet in the USA.

There were plenty of other bidders for Virgin when it when into administration.

When Bain acquired Virgin Australia the USA partner was Delta and there were at no plans to switch to United. Also at this time, Singapore Airlines were a main partner with no plans of Qatar coming on board. How things have changed!

 

[jase05]

They are simply stating what ACCC will readily see - it is Qatar's clumsy back door tactic to double their flights to here after that was rejected publicly in recent times.

There is no Virgin staffing employment on the wet lease services - correct?

So the only loser can be Qantas.

All bonus bucks in the bank to Bain of course for the Qatar backs and even that 25% stake money does not stay in Australia, it goes right into Bain's wallet in the USA.

If the wet leases are only for a limited time frame I can’t see an issue with it and I would hope the ACCC also see it that way.

 

[justinbrett]

Some interesting parts in the application on the ACCC website, for those interested, in particular...

- Subject to certain exceptions outlined in Virgin Australia’s submission, Qatar Airways will become Virgin Australia’s exclusive interline, codeshare and loyalty partner headquartered in the Middle East or Türkiye and Virgin Australia will become Qatar Airways’ exclusive interline, codeshare and loyalty partner headquartered in Australia.

- The ability to share information to the extent necessary to facilitate the matters referred to above and to explore opportunities for deeper cooperation. This may include developing new routes.

Virgin Australia and Qatar Airways

Virgin Australia and Qatar Airways (the Applicants) seek authorisation to engage in cooperative conduct under an integrated alliance including:

www.accc.gov.au

So VA dumps EY… we all saw that coming.

QR dumps all ties with QF including interline… except for oneworld requirements. It also only specifies it won’t codeshare on other international flights, so I think QR can keep selling QFd. Basically, status quo.

 

[justinbrett]

If the wet leases are only for a limited time frame I can’t see an issue with it and I would hope the ACCC also see it that way.

It’s not really the ACCC approval that’s the hard part - although from what I’ve read so far I haven’t seen any mention of the QR/BA/IB JV. ACCC may break up that JV in order to approve this.

Convincing IASC that this counts as an Australian service is the hard part. Unions are already campaigning against it.

Are you surprised that the Qantas pilots union has "slammed" this? lol
That is not something the ACCC even put into consideration AFAIK.

Because it’s not their jurisdiction. That’s the IASC. Completely different department.

 

[RooFlyer]

They are simply stating what ACCC will readily see - it is Qatar's clumsy back door tactic to double their flights to here after that was rejected publicly in recent times.

clumsy is a funny word to describe it. Perfectly transparent and upfront and sent to the authorities for approval or not.

So the only loser can be Qantas.

Diddums for Qantas. The only winner or loser we shoulf care about is Australian travelling public.

 

[jase05]

QR dumps all ties with QF including interline… except for oneworld requirements. It also only specifies it won’t codeshare on other international flights, so I think QR can keep selling QFd. Basically, status quo.

Feel like some of this is already happening behind the scenes. My folks have just booked on QR to the UK out of CBR and the old man was staggered that QR had no QF options on any days he looked, it was Link to SYD or VA to MEL. I did tell him to take the MEL option

 

[justinbrett]

Diddums for Qantas. The only winner or loser we shoulf care about is Australian travelling public.

Probably should care about Australian workers too, otherwise may as well shut down all of our airlines and open the market to the cheapest bidder.

Feel like some of this is already happening behind the scenes. My folks have just booked on QR to the UK out of CBR and the old man was staggered that QR had no QF options on any days he looked, it was Link to SYD or VA to MEL. I did tell him to take the MEL option

No that’s what I was saying, there’s no change. It’s the status quo. I thought they might completely cut QF domestic off too (still surprised QR is selling that) but the way the application is worded, I think QR can keep doing that. They only use QFd on routes where VA doesn’t have a big presence.

 

[jase05]

No that’s what I was saying, there’s no change. It’s the status quo. I thought they might completely cut QF domestic off too (still surprised QR is selling that) but the way the application is worded, I think QR can keep doing that.

Perhaps with VA’s domestic network being nowhere near as good as QF’s I guess QR still have a use for them and they can have the best of both worlds so to speak.

 

[justinbrett]

Perhaps with VA’s domestic network being nowhere near as good as QF’s I guess QR still have a use for them and they can have the best of both worlds so to speak.

QR the airline (having access to VA and QF elites) and QF FFs (having status with QR and EK) have the best of both.

 

[jase05]

QR the airline (having access to VA and QF elites) and QF FFs (having status with QR and EK) have the best of both.

I’m thinking more from on operating POV not FF’s. QR want to offer seemless travel to most ports in Australia and they can’t do that with just the VA network here so I guess they do need QF still

 

[Human]

There is no Virgin staffing employment on the wet lease services - correct?

Doesn't that depend on the wording of the contract between Virgin and Qatar? Of course, Qatar would provide the staff on board the plane (pilots and cabin crew) but that doesn't necessarily mean that Qatar would provide or employ the caterers, booking agents, ground staff, baggage handlers, etc.

I don't understand why we're jumping to conclusions that a wet lease arrangement would mean zero Australian jobs.

 

[Bagpuss]

So VA dumps EY… we all saw that coming.

I think SQ are also dumped.

 

[HS-TQE]

I think SQ are also dumped.

Considering the VA search engine still lists SQ options around Asia, yet is demoted on VA/VFF European search/redemption options in favour of QR suggests that SQ may become largely an Asian feeder under a QR part-ownership, pending FIRB approval.

 

[justinbrett]

I’m thinking more from on operating POV not FF’s. QR want to offer seemless travel to most ports in Australia and they can’t do that with just the VA network here so I guess they do need QF still

Yeah that’s also true. QF still sells UA and HA even though it has codeshare with AA and AS. TK is using all three (QF, VA, JQ) I believe.

Speaking of HA I guess those days are numbered too, maybe VA can wet lease UA to HNL?

Doesn't that depend on the working of the contract between Virgin and Qatar? Of course, Qatar would provide the staff on board the plane (pilots and cabin crew) but that doesn't necessarily mean that Qatar would provide or employ the caterers, booking agents, ground staff, baggage handlers, etc.

I don't understand why we're jumping to conclusions that a wet lease arrangement would mean zero Australian jobs.

No it’s not zero. Clearly the ground jobs have to be Australian based, as they would be for any international airline. I think the argument is in comparison to a dry lease where the crew would be Australians.

 

[HS-TQE]

Yeah that’s also true. QF still sells UA and HA even though it has codeshare with AA and AS. TK is using all three (QF, VA, JQ) I believe.

TK didn't have an interline with VA at the time they've started services to MEL, they were in negotiations with REX at the time for an FF partnership (which never occurred obviously) and had the QF group (QF and JQ) as their exclusive interline partner in Australia.