Qatar Airways to acquire 25% of Virgin Australia

[Harrison_133]

Wonder if they could possibly end up in VA colours.

American Airlines Abandoned Their Airbus A330s – Now Qatar Airways May Give Them New Life - View from the Wing

Even though the Airbus A330-200s were parked four and a half years ago, that fleet is still only about 13 years old on average. It was larger in quantity and newer than the 9 orphan -300s which were certainly on the way out, even without the pandemic. These planes were ex-US Airways, from...

viewfromthewing.com

The A330s won't have the range for Doha - Australia.

 

[HS-TQE]

More likely I'd be tipping that QR will use the A330s for regional ops, freeing up the 77Ws required for the wetlease VA ops.

 

[justinbrett]

That's a shocking excuse that could be used in any situation.

We're flying somewhere else new so we'll wet lease with foreign workforce back over there.

Shocking? Really? A bit precious, don’t you think?

Lots of major airlines wet lease to fill temporary shortfalls in their capacity - NZ, BA, even QR!

We all know the VA deal is about increasing QR capacity. I mean, VA literally called it Project Doubles. They’re not even trying to hide it. If it was for a new route like SYD-LAX maybe, but let’s call this for what it is.

 

[justinbrett]

I assume you're NOT trying to argue that QF should be allowed to wet lease because they're bigger than VA!


I'd also "imagine" that VA would have liked to go dry lease from day 1 -- if it could. Why would either QF or VA choose wet leasing as their first option? They're only doing it because they have the choice between wet leasing or not flying the route at all.

I guess I am. Wet leasing a small percentage of long haul services for three years before a confirmed switch to a dry lease, is quite different to wet leasing 100% of your long haul services, from an airline flying to its hub that you have a JV with, that tried to increase its capacity but was blocked by the government.

Perhaps if QF was wet leasing AY to fly PER-HEL after AY was denied capacity, we might have a closer analogy. But there’s no chance in HEL AY would be flying SIN/BKK-SYD without QF wet leasing.

I don’t think VA wants the risk of dry leasing from day 1.

 

[simmomelb]

It should be an interesting day today/tomorrow, I have a very strong feeling we'll have a lot to digest.

 

[RooFlyer]

It should be an interesting day today/tomorrow, I have a very strong feeling we'll have a lot to digest.

I dare say some will be highly exercised either way.

I doubt Virgin will get approval to proceed as they wish but if they do, I’ve got all my QR flights locked in for next year already. including using Velocity points as it happens ( multiple choices for QR flights in July next year). For me, I think it’s about increased competition and hopefully lower airfares on the Europe route but I’m unlikely to use this particular (VA) service.

 

[justinbrett]

I doubt Virgin will get approval to proceed as they wish

Well it’s pretty clear they’ve already made a major concession in the exclusivity backflip.

EY was always going to be terminated but looks like not much else will change, a very different story to the application. Although I guess those changes will still probably happen at a later date.

It’s really only the wet lease issue now and IMHO that’s more of an ISAC issue than ACCC.

If approved it will be interesting to see the price difference between the QR coded flights. As those with non QR oneworld status will need to book on the non-VA flight that might fill up faster - and should be no real difference for VA pax booking between the two on VA codes.

 

[Mattg]

I don’t think VA wants the risk of dry leasing from day 1.

This section from VA's latest ACCC submission was quite interesting (my bolding):

There is no scenario where Virgin Australia can do this by itself today or build a long-haul business independent of a scale international partner carrier.

Virgin Australia does not intend to repeat the mistakes of its past. [RESTRICTION OF PUBLICATION CLAIMED]

Without the Proposed Conduct, Virgin Australia would not be able to viably commence new services between Australia and Doha.

I wonder what was in the redacted section. I suspect it might have been talking about VA losing money when it flew its own aircraft to AUH.

 

[Zanzara]

But a bit of a flawed argument.

QF launched new routes because this wet lease allowed them to move aircraft from SIN/BKK to the new markets. Had they not had the wet lease these new services couldn’t be launched.

QF just has the scale to allow the wet lease on the most viable routes (ie existing AY ports). I’d also imagine QF would have liked to go dry lease from day 1 if it could.

It’s not really flawed. According to QF staff, poor decisions resulted in prematurely disposing of too many aircraft, which included conversion of some to freighters. This meant that QF no longer had any suitable aircraft they could use. There’s an interesting section about it in the Chairman’s Lounge. If anything, QF have shot themselves in the foot and helped VA and the ACCC identify flaws in QF’s opposition.

 

[justinbrett]

It’s not really flawed. According to QF staff, poor decisions resulted in prematurely disposing of too many aircraft, which included conversion of some to freighters. This meant that QF no longer had any suitable aircraft they could use. There’s an interesting section about it in the Chairman’s Lounge. If anything, QF have shot themselves in the foot and helped VA and the ACCC identify flaws in QF’s opposition.

Those poor decisions were an overreaction of Covid.

VA1 went into administration and lost its entire long haul fleet, so not that bad in comparison.

 

[Saab34]

AFR hinting that an announcement is due this week or tomorrow, however they said that about the whole deal for about a year so we will wait and see. They did cite conditions attached however, will be interesting to see the years tied to the wet lease, assuming 3-5 years.

IASC mustn’t be required here which is weird.

 

[simmomelb]

AFR hinting that an announcement is due this week

The AFR really are on top of this, given the ACCC said from the beginning they would make an announcement in November, so yes, it will be this week.
They are an observant bunch

 

[oz_mark]

IASC mustn’t be required here which is weird.

I would have thought they'd apply once the agreement is ticked off. As it stands, they don't have the capability to deliver