Qatar Airways to acquire 25% of Virgin Australia

[oz_mark]

An interesting part in this is the delayed departure of the CEO Jayne Hrdlicka.

It’s clear that Paul Jones was the lead contender. It seems things have changed. His previous stint at Qantas might be an issue for QR. I also think they might want someone with some financial experience behind them.

The Australian is reporting Qatar might be inclined to pull someone out of its address book.

I thought he was the lead internal candidate, but there was an external candidate still in the running. The TWU had reservations about the internal candidate....

 

[Bagpuss]

Was having a think about the Qatar investment and the ACCC application.

I'm wondering if Qatar being exclusive into regions which kicks out a number of partners such as Etihad, South African, Virgin Atlantic (?), limits Singapore Airlines maybe too much of a disadvantage.

This may be a tactic for now to try for exclusive and it could change to Qatar is the "in principle" airline partner and some restrictions around in which country the point of sale is.

Time shall tell, but this is probably a sticking point.

One the plus side, consumers will brand recognize these airlines as they are established.

 

[Saab34]

I thought he was the lead internal candidate, but there was an external candidate still in the running. The TWU had reservations about the internal candidate....

JH is appearing at numerous conferences over the coming months, as VAA CEO. So I don’t think she is going anywhere until 2025.

I do recall John Borghetti had a similar long winded departure also. Alan Joyce likewise.

Perhaps Qatar want Jayne on board until they can get everything past the ACCC/IASC. No doubt QR have dealt with Bain and Jayne considerably in recent times, would be a bit hard on QR’s end to put up this big deal with a few hurdles still to overcome, then send JH on her way while the new guy takes over. You would want to hold her until the deal is well and truly smoothed over me thinks, she is well experienced to deal with any local hurdles.

 

[aus_flyer]

JH is appearing at numerous conferences over the coming months, as VAA CEO. So I don’t think she is going anywhere until 2025.

I do recall John Borghetti had a similar long winded departure also. Alan Joyce likewise.

Perhaps Qatar want Jayne on board until they can get everything past the ACCC/IASC. No doubt QR have dealt with Bain and Jayne considerably in recent times, would be a bit hard on QR’s end to put up this big deal with a few hurdles still to overcome, then send JH on her way while the new guy takes over. You would want to hold her until the deal is well and truly smoothed over me thinks, she is well experienced to deal with any local hurdles.

Which begs the question... why give her the boot in the first place?

 

[SCM]

Was having a think about the Qatar investment and the ACCC application.

I'm wondering if Qatar being exclusive into regions which kicks out a number of partners such as Etihad, South African, Virgin Atlantic (?), limits Singapore Airlines maybe too much of a disadvantage.

I submitted my comments to ACCC about this, it's still open until the 7th - would urge others to do the same, as it clearly stifles competition for all VA customers heading to EMEA.

 

[simmomelb]

Was having a think about the Qatar investment and the ACCC application.

I'm wondering if Qatar being exclusive into regions which kicks out a number of partners such as Etihad, South African, Virgin Atlantic (?), limits Singapore Airlines maybe too much of a disadvantage.

This may be a tactic for now to try for exclusive and it could change to Qatar is the "in principle" airline partner and some restrictions around in which country the point of sale is.

Time shall tell, but this is probably a sticking point.

One the plus side, consumers will brand recognize these airlines as they are established.

I initially thought about that, but it's not booting any airline out, these other airlines can continue to be players in the Australian market, it only impacts the frequent flyer & codeshare benefits.
I'm not sure this will be of great consideration to the ACCC.
I don't think they can force any airline to be/continue to be codeshare or FF partners.

 

[jase05]

I submitted my comments to ACCC about this, it's still open until the 7th - would urge others to do the same, as it clearly stifles competition for all VA customers heading to EMEA.

I really hope that frequent flyers are a consideration for the ACCC.
Those airlines are still flying to Australia and as we are seeing with SQ they might actually increase their services to reduce their reliance on VA feeds

 

[drron]

It certainly isn't impacting travel to Europe with awards. Business awards still available on both SQ and QR throughout September 25 and today for 1/10/25. On EY only Y awards but available every day leading up to and including 1/10/25. Will be interesting to see what's available tomorrow for 2/10/25.

 

[Saab34]

Which begs the question... why give her the boot in the first place?

Many outlets reporting it was tension between JH and Bain. However, then Rex fell over, and QR talks obviously beefed up, so that’s an awkward path for Bain to navigate, as they need her experience to get through those things.

The stumbling with the float attempts, and some personal reasons on JH’s end, seemed to point towards its time for someone else to steady the ship. She doesn’t appear to be in any rush, her point was she wasn’t going to commit for the next 4-5 years of turnaround, but the near term doesn’t seem to be an issue.

Will still no doubt stand to earn tens of millions when it’s all floated and Bain has departed. She will be up there with Alan in terms of total earnings over her career.

 

[elanshin]

It certainly isn't impacting travel to Europe with awards. Business awards still available on both SQ and QR throughout September 25 and today for 1/10/25. On EY only Y awards but available every day leading up to and including 1/10/25. Will be interesting to see what's available tomorrow for 2/10/25.

Wouldn't that be because this deal isn't approved and through already?

VA won't be making the changes until QR actually takes the reign. In the event the deal is blocked for any reason, they shoot themselves if they proactively change anything.

They are disclosing what will happen if it does go through. I would imagine this is also why we aren't seeing actual responses from their partners for now.

Edit: for all we know SQ might also be making a submission to ACCC about various interests.

 

[justinbrett]

I initially thought about that, but it's not booting any airline out, these other airlines can continue to be players in the Australian market, it only impacts the frequent flyer & codeshare benefits.
I'm not sure this will be of great consideration to the ACCC.
I don't think they can force any airline to be/continue to be codeshare or FF partners.

I don’t know about that. VA’s strategy of signing geographically exclusive partnerships could easily be seen as anticompetitive.

SA’s continued future in Australia is seriously in doubt after this. EY will continue to decline here. Even SQ will lose pax.

 

[simmomelb]

I don’t know about that. VA’s strategy of signing geographically exclusive partnerships could easily be seen as anticompetitive.

SA’s continued future in Australia is seriously in doubt after this. EY will continue to decline here. Even SQ will lose pax.

They will need to weigh up the benefits to the public of bringing more competition to the air (more planes), more so than a FF club, which only impacts a smaller number of people who choose to be loyal (which has no impact on competition).
We can agree to disagree on that one, but I think they will barely touch on this topic, the benefits of greater competition in the air are what is important.

Time will tell, we can touch back on this in the next week or two, no doubt

edit: I highly doubt SA's future is up in the air with Australian routes simply because of this, I'd guess little to no impact. What SA decides to do with routes is a totally separate matter, the ACCC doesn't make decisions based on speculation.

 

[RooFlyer]

I submitted my comments to ACCC about this, it's still open until the 7th - would urge others to do the same, as it clearly stifles competition for all VA customers heading to EMEA.

So, potentially opening up a dozen or more wide-body flights to DOH (connecting onto Europe) as VA flights stifles competition for VA customers? They can still fly EY etc if they like, just won't get their precious VA status perks. Very reasonable for VA to say to customers - you want your VA status perks? Fly VA, now we have our own flights.

Yes, I'm going to submit - saying that its a bloody good idea. More flights on all or any carriers, the better.

SA’s continued future in Australia is seriously in doubt after this.

Seriously? Sounds a line straight out of the Qantas play book - in fact, that type of argument was out of the Qantas play book the previous time VA asked for more flights.

It should be about the outcomes for the flying public of Australia, not the impact on any particular airline. The good ones will succeed, the bad ones may not. Tough.

 

[aus_flyer]

I submitted my comments to ACCC about this, it's still open until the 7th - would urge others to do the same, as it clearly stifles competition for all VA customers heading to EMEA.

As far as I am aware, VA doesn’t coordinate pricing or schedules with EY or SQ, so I’m not sure what your point is. Nothing from a competition perspective is being taken away, so I don’t see how it is stifling competition in any way. It’s only improving it.

 

[HS-TQE]

VA hasn't been in active JVs (e.g joint co-ordination of fares and services) since emerging from administration. Their last JVs with DL and EY were all largely ended during administration (replaced with codeshare/FF agreements with UA and QR), with the former partner exiting VA/VFF entirely and the later partner demoted to a unilateral codeshare (domestic codeshare for EY customers) and VFF redemption partner (for VA customers)

 

[justinbrett]

They will need to weigh up the benefits to the public of bringing more competition to the air (more planes), more so than a FF club, which only impacts a smaller number of people who choose to be loyal.
We can agree to disagree on that one, but I think they will barely touch on this topic due to the benefits of greater competition in the air.

Time will tell, we can touch back on this in the next week or two, no doubt

edit: I highly doubt SA's future is up in the air with Australian routes simply because of this, I'd guess little to no impact.

We’ll see what ACCC has to say. Exclusive partnerships seem pretty anticompetitive (and unnecessary) I think.

SA’s future was already in doubt, especially if QF launch services ex PER - and losing VA pax to QR is only going to hurt more.

It should be about the outcomes for the flying public of Australia, not the impact on any particular airline. The good ones will succeed, the bad ones may not. Tough.

Something tells me you will have a different attitude if QF launches PER-JNB.

As far as I am aware, VA doesn’t coordinate pricing or schedules with EY or SQ, so I’m not sure what your point is. Nothing from a competition perspective is being taken away, so I don’t see how it is stifling competition in any way. It’s only improving it.

I think it’s just a different way of thinking, that QF status means you can pick from a large choice of airlines, you don’t have to be concerned with which airlines QF coordinates prices with or has a JV. In fact you can book on their arch rival QR and be treated as an elite.

Access to Velocity members is a significant advantage (if they don’t have access to QF members) as many will preference airlines they can earn points and use status (even if @RooFlyer thinks that’s a bad idea, it’s a strategy used my millions).

Access to FF benefits and lounges is regularly mentioned in ACCC authorisations so it’s not wise to completely ignore this factor.

 

[simmomelb]

We’ll see what ACCC has to say. Exclusive partnerships seem pretty anticompetitive (and unnecessary) I think.

It's exclusive for codeshare and frequent flyers on those routes for pax that choose to collect Velocity points & perks, this has no direct negative impact on competition, quite the contrary.

Adding more flights has a direct positive impact on competition for the benefit of everyone (all types of flyers).
Bringing more competition to the air is what is important to the greater population.

Anyway, I will leave it there, as I should have

 

[RooFlyer]

Something tells me you will have a different attitude if QF launches PER-JNB.

Actually, my apologies. In your sentence SA’s continued future in Australia is seriously in doubt after this. EY will continue to decline here. Even SQ will lose pax. I read SQ when you wrote SA. Senior moment.

But, no my attitude won't change; I mean, if SAA goes, Qantas wouldn't use its (near) monopoly service to gouge customers, would it? But I don't think SAA will be driven out. Its a healthy business + leisure route with very many Sth African (and neighbouring countries) expats in Perth.

And like Fiji Airways through to LAX, across the Indian Ocean there is always Air Mauritius. Dying to try them with Aeroplan miles.

Access to Velocity members is a significant advantage (if they don’t have access to QF members) as many will preference airlines they can earn points and use status (even if @RooFlyer thinks that’s a bad idea, it’s a strategy used my millions).

I've never said its a 'bad idea' - I'm simply said that one shouldn't feel 'handcuffed' by status perks to a particular airline and that 'chasing' status is a bad strategy (in as much that if you fly enough to make the status worthwhile, you'll earn it naturally, without chasing). I have, and will continue to switch Velocity points to SQ miles to redeem on Krisflyer (day flights only!). If they remove the interchangeability, I'll be really peeved.

Which brings me to me feeling a bit chuffed that I've just booked QSuites from BNE-xDOH-AMS next year, the route I wanted and only a day off my ideal, using Velocity points. I had SQ options there, and the taxes etc were about half QR's, but the SQ bed is bloody awful, so happy to leave that to others.

 

[justinbrett]

But, no my attitude won't change; I mean, if SAA goes, Qantas wouldn't use its (near) monopoly service to gouge customers, would it? But I don't think SAA will be driven out. Its a healthy business + leisure route with very many Sth African (and neighbouring countries) expats in Perth.

I have no doubts for the PER-JNB route, however QF were already planning on launching this even before SA ceased flying it the first time, so it’s not unlikely. Now VA has vacated the field I actually think it’s more likely QF and SA will sign an agreement, although QF’s recent deal with 4Z throws a spanner in the works.

The JNB routes are comparable to SCL routes, and ACCC continues to authorise codeshares between QF and LA, so it’s not out of the question (and was in place some years ago)

It's exclusive for codeshare and frequent flyers on those routes for pax that choose to collect Velocity points & perks, this has no direct negative impact on competition, quite the contrary.

Adding more flights has a direct positive impact on competition for the benefit of everyone (all types of flyers).
Bringing more competition to the air is what is important to the greater population.

Anyway, I will leave it there, as I should have

So riddle me this - why did QR partner with VA?

Of course it makes a huge difference having access to one of the two FF ecosystems. You’re kidding yourself if you think otherwise.

People who would have booked with EY/SQ/SA etc will now book with QR, so you’re just moving bums from one seat to another. In the short term prices may drop but eventually the market will level out. This is not the kind of thing that stimulates new growth (unlike TK’s entry for example).

But we’ll see.

 

[aus_flyer]

At the end of the day, doubling QR’s capacity can only be good for competition. Increasing supply is a good thing.