Qatar Airways to acquire 25% of Virgin Australia

[MooTime]

These are the same proposed VA services to Doha that will receive only 50% Status Credits as previously.

Bringing on new services that get next to nothing in terms of SC...way to go VA management, when your on a roll.

 

[elanshin]

Fact: VA's services to Abu Dhabi failed.
Fact: QF discontinued its flights to Dubai (whether you want to call that a "failure" or not is debatable and probably depends on your definitions).

What those things tell us is that the success of VA's flights to Doha is not the "slam dunk" that some people seem to think it will be.

This is a risk -- yes, a calculated one, and a risk that will (in my opinion) probably succeed, but a risk nevertheless. I can't see why calling it a "toe in the water" is inappropriate.

Serious question to @justinbrett and @elanshin : in the light of VA's failed flights to Abu Dhabi, what makes you so certain that this time things will be totally different?

It's not that VA will succeed flying to DOH. Firstly current VA has no aspirations for long haul flying by themselves right now. This isn't VA deciding to try it out, this is QR paying VA to get around QR's own restrictions. You can be sure that on QR's own booking you'll see all the VA flights as codeshares.

Thats why there's a lot of the thread asking for it to be wet-leased transition into dry lease guarantee. That way VA would actively need to be involved for both their own staff and medium term strategies.

The other part is that this also now not just about VA flying to DOH successfully. It is also about QR locking up VA as a partner.

The ME is getting more competition especially for Australia over the next few years and this is QR moving first locking up the domestic feeder. Again great for QR, great for Bain, not necessarily so in the medium term for VA flyers.

If QR decides hey we don't need this anymore (be it route doing poorly or Aus government grants more slots) they could easily at a flip just not continue wet leasing to VA at the end of the agreement and now VA is in a worse position.

It's fundamentally different to VA investing (and taking on risk) with their own metal flying to DOH.

 

[justinbrett]

Fact: VA's services to Abu Dhabi failed.
Fact: QF discontinued its flights to Dubai (whether you want to call that a "failure" or not is debatable and probably depends on your definitions).

What those things tell us is that the success of VA's flights to Doha is not the "slam dunk" that some people seem to think it will be.

This is a risk -- yes, a calculated one, and a risk that will (in my opinion) probably succeed, but a risk nevertheless. I can't see why calling it a "toe in the water" is inappropriate.

Serious question to @justinbrett and @elanshin : in the light of VA's failed flights to Abu Dhabi, what makes you so certain that this time things will be totally different?

Because VA isn’t flying to DOH. QR is.

The rest is just a sham to increase capacity. Surely you must see that? It seems everyone else can.

 

[elanshin]

VA could legitimately be a sought after partner if they were neutral and have TK (and probably RX) onboard and they'd have a huge selection of choice to fly to Europe compared with QF/EK.

I wonder if this move will prompt SQ to aggressively push KF into Australia and just reduce their partnership with VA to codeshare and interline agreements. That would massively hurt VA/VFF if KF is a much easier currency to earn in Australia.

 

[justinbrett]

So to recap (intl airlines only):

Airlines cut completely:
EY
SA
VS

Airlines cut partially:
SQ

Airlines likely to be cut:
HA

No change (for now):
UA
NH
AC
HU
HX
JD

The new master:
QR

 

[HS-TQE]

I wonder if this move will prompt SQ to aggressively push KF into Australia and just reduce their partnership with VA to codeshare and interline agreements. That would massively hurt VA/VFF if KF is a much easier currency to earn in Australia

The current SQ/VA partnership is currently just a codeshare/FF and interline arrangement.

Not sure if deleting FF/Lounge access from the existing SQ/VA partnership would achieve for SQ apart from more lounge space by the removal of VA/VFF elites.

KF has expiry dates for points, so SQ/KF does have a bit of work to make KF more attractive than VFF (or QFF)

 

[BrianQQ]

So coughtier outcomes for Velocity members, especially if SQ benefits are gone.

And with QR restricting their best lounges from elites, they'll just get cough on in Doha as well.

........... What am I missing here that benefits the customer.

 

[justinbrett]

So coughtier outcomes for Velocity members, especially if SQ benefits are gone.

And with QR restricting their best lounges from elites, they'll just get cough on in Doha as well.

........... What am I missing here that benefits the customer.

I’m surprised this thread went quiet so early. These changes are arguably worse than the changes announced last week. Effectively giving up their patchwork alliance and now all eggs in the QR basket.

 

[jase05]

So coughtier outcomes for Velocity members, especially if SQ benefits are gone.

And with QR restricting their best lounges from elites, they'll just get cough on in Doha as well.

........... What am I missing here that benefits the customer.

It’s just speculation at the moment. No one knows what it will look like and no one is saying SQ benefits are going disappear.
It might turn out just fine

 

[HS-TQE]

The only "confirmation" at this stage is that QR becomes the exclusive partner for Middle East and Europe, which removes rival SQ as a European option and deletes the minor VS partnership entirely.

There is no other confirmation that the SQ partnership will be going away entirely considering there are still SQ reward seats and fares available throughout Asia, and QR isn't that stupid to think people are willing to backtrack via Doha to go back to Asia. Same applies for USA, removing the UA partnership would send passengers to their "mortal enemy" QF, and UA would likely be seen as the "lesser of the evils" by QR.

 

[justinbrett]

It’s just speculation at the moment. No one knows what it will look like and no one is saying SQ benefits are going disappear.
It might turn out just fine

It’s in the ACCC application.

If approved VA can’t go back on that. Unless you think it won’t be approved?

The only "confirmation" at this stage is that QR becomes the exclusive partner for Middle East and Europe, which removes rival SQ as a European option and deletes the minor VS partnership entirely.

And deletes EY and SA.

 

[serfty]

Airlines likely to be cut:
HA

This will happen anyway.

 

[justinbrett]

This will happen anyway.

Yes that’s what I meant, it will be HA (AS) doing the cutting.

 

[jase05]

It’s in the ACCC application.

If approved VA can’t go back on that. Unless you think it won’t be approved?



And deletes EY and SA.

But as posted above. Doesn’t that only affect the ME and Europe?
Yes VS and SA would be removed and SQ to Europe would be out but there is no reason why VA and SQ still can’t operate between Asia and Australia for example and still have some form of mutual partnerships

 

[justinbrett]

But as posted above. Doesn’t that only affect the ME and Europe?
Yes VS and SA would be removed and SQ to Europe would be out but there is no reason why VA and SQ still can’t operate between Asia and Australia for example and still have some form of mutual partnerships

Well that’s what I meant, none of that is speculation. It’s already detailed in the application.

That said, SQ doesn’t need VA. It already flies to the major cities including CNS and DRW. It could become airline agnostic for other domestic connections. Or even do a QF domestic deal like NZ did.

Maybe it prefers the direct business. What’s VA going to do about that? People will still book SQ.

 

[elanshin]

But as posted above. Doesn’t that only affect the ME and Europe?
Yes VS and SA would be removed and SQ to Europe would be out but there is no reason why VA and SQ still can’t operate between Asia and Australia for example and still have some form of mutual partnerships

Depends on how SQ responds as well. This assumes SQ would be amenable to the new conditions. They may not. That's for SQ to decide if this is formalised.

Also it excludes TK as well and RX. The latter of which I'm sure QR is eyeing right now and trying to tighten their grips before RX comes swinging into the market with Saudi money. They're fully aware of how much marketshare they took from their ME competitors and RX is going to be eyeing QR customers.

 

[HS-TQE]

That said, SQ doesn’t need VA. It already flies to the major cities including CNS and DRW. It could become airline agnostic for other domestic connections. Or even do a QF domestic deal like NZ did.

SQ also doesn't need a QF/NZ style domestic deal either. It could just simply interline with both carriers and maintain a (unilateral) FF/codeshare relationship for VA's 'Asia Network' for Asia flights via SIN.

 

[elanshin]

SQ also doesn't need a QF/NZ style domestic deal either. It could just simply interline with both carriers and maintain a (unilateral) FF/codeshare relationship for VA's 'Asia Network' for Asia flights via SIN.

Or push Krysflyer harder in Australia.

 

[jase05]

Well that’s what I meant, none of that is speculation. It’s already detailed in the application.

That said, SQ doesn’t need VA. It already flies to the major cities including CNS and DRW. It could become airline agnostic for other domestic connections. Or even do a QF domestic deal like NZ did.

Maybe it prefers the direct business. What’s VA going to do about that? People will still book SQ.

No arguments there and I think they will eventually split up but no one has an idea what will happen yet. If it happens it happens and I’d still fly SQ to SE Asia but I don’t use them to anywhere else so nothing is going to change for me in that regard

 

[justinbrett]

SQ also doesn't need a QF/NZ style domestic deal either. It could just simply interline with both carriers and maintain a (unilateral) FF/codeshare relationship for VA's 'Asia Network' for Asia flights via SIN.

Why let VA profit from codeshare when it can just take the business direct? As I said, what’s VA going to do about it? They won’t launch their own services.

Difference with NZ is VA could launch its own services. It just doesn’t.

Or push Krysflyer harder in Australia.

Exactly. It’s not a boutique airline in this market, it’s a major force. They don’t need a local partner.