Qatar Airways to acquire 25% of Virgin Australia

[p--and--t]

Certainly wouldn’t be using the word “forever”. Not really a term that applies to aviation.

No truer words spoken.

 

[SeaWolf]

The ACCC has issued its draft determination:

https://www.accc.gov.au/system/files/public-registers/documents/Draft%20Determination%20-%2018.02.25%20-%20PR%20-%20AA1000679%20Virgin%20Qatar_0.pdf?ref=0&download=y

The ACCC proposes to grant authorisation to enable the Applicants to engage in
cooperative conduct under an integrated alliance (as set out specifically in paragraph
5.7), including:
• cooperation in relation to deployment of capacity on routes between Australia and Doha
• cooperation on network planning, pricing (including joint pricing), sales and marketing strategies, loyalty programs and B2B partners, service levels and product standards to customers
• the ability to jointly identify and approach corporate and SME customers with tailored corporate offerings and discounts
• joint procurement
• information sharing to facilitate the matters above and explore opportunities for deeper cooperation.

 

[justinbrett]

Which seems to indicate that they don’t need an end date. These flights will probably go on forever, or until, QR gets more bilaterals allocated over time then somewhat they can operate without a lease.

ACCC's response to this was:
The Proposed Conduct is not unchecked and is subject to various initial and periodic regulatory approvals and reviews including by the ACCC (now and if /
when reauthorisation is sought after 5 years), the International Air Services Commission (now and upon review in 5 years), the Department of Infrastructure, Transport, Regional Development, Communications and the Arts and the Foreign Investment Review Board.

It also went on to say QF needed 2.5 years to transition from wet to dry lease, and "it is reasonable to expect that Virgin Australia would require longer to plan and test its re-entry into the supply of long haul international services."

Certainly not saying this can just continue "forever".

 

[HS-TQE]

So, not surprisingly, it's a 5 year authorisation.

Qatar (the country) may get more in their bilateral over time (1-2 daily slots from the 'Big 4' capitals) over time, and they could potentially apply again to the next Australian Government to go above the incremental bilateral increases which could make the VA/QR wetlease redundant in 5 years time.

 

[elanshin]

So, not surprisingly, it's a 5 year authorisation.

Qatar (the country) may get more in their bilateral over time (1-2 daily slots from the 'Big 4' capitals) over time, and they could potentially apply again to the next Australian Government to go above the incremental bilateral increases which could make the VA/QR wetlease redundant in 5 years time.

Thats probably the more likely result in that they get more authorisation and drop the whole VA dance and pending who the other cornerstone investors for VA2.5 are (if any) we'll see how it VA evolves.

 

[Doctore1003]

Interesting para in an article in the Australian:

“Neither Qatar nor Virgin would answer questions about whether the Australian airline’s reward points will shift over to the Avios program used by its Doha suitor if the takeover deal is approved.”

Hmmmm

https://www.theaustralian.com.au/business/aviation/scoring-qantas-rewards-seats-might-be-about-to-get-easier/news-story/9cb7539ca60413bd5f8c3034b374a19a

 

[pauly7]

Interesting para in an article in the Australian:

“Neither Qatar nor Virgin would answer questions about whether the Australian airline’s reward points will shift over to the Avios program used by its Doha suitor if the takeover deal is approved.”

Hmmmm

https://www.theaustralian.com.au/business/aviation/scoring-qantas-rewards-seats-might-be-about-to-get-easier/news-story/9cb7539ca60413bd5f8c3034b374a19a

Well Velocity is hardly a stellar program anymore, especially after the last round of devaluations

 

[justinbrett]

Interesting para in an article in the Australian:

“Neither Qatar nor Virgin would answer questions about whether the Australian airline’s reward points will shift over to the Avios program used by its Doha suitor if the takeover deal is approved.”

Hmmmm

https://www.theaustralian.com.au/business/aviation/scoring-qantas-rewards-seats-might-be-about-to-get-easier/news-story/9cb7539ca60413bd5f8c3034b374a19a

Not that interesting. No incentive to rule it out, but that doesn't mean anything.

Avios would be good for Velocity but not for VA. For the former, means you could use Velocity ground partners to fly on oneworld including QF. For VA, apart from a niche group of Australian based pax using BA/IB/AY programs, not really any extra avenues to sell VA flights via points.

I wouldn't rule out a one way transfer facility like VA->SQ with a penalty, but even that's a stretch IMO.

 

[HS-TQE]

Possible, but I'd say unlikely. Bain as the majority owners will likely want to continue devaluing primarily long haul international codeshare customers and 'refocus' Velocity primarily on their domestic / WA Fifo & international leisure customers to Bali and Fiji as a primary "Domestic Carrier"

Although unlikely, there's a better chance of the Velocity/Krisflyer transfer program being replaced with Velocity/Avios transfer program at this stage, albeit with a similar penalty for Velocity > Krisflyer transfers.

 

[Saab34]

Group Valuation would drop a bit, won’t happen. If the program was somewhat not high in earnings, then perhaps.

 

[RooFlyer]

Well Velocity is hardly a stellar program anymore, especially after the last round of devaluations

Horses for courses. It got me CGK-DOH-MAD and then CPH-DOH-BNE on Qatar, in J, on the dates I wanted (several choices), about 9 months out IIRC. And I rarely have issue getting a domestic J award on VFF, say HBA-BNE.

EDIT: And I've converted some to KF and got a J flight to Bali via SIN on SQ at Christmas. Not bad.

When most of us have a shed load of points, VFF or QF, I reckon it's the ability to get ANY J award seat (esp international), on or near the dates/destinations you want, that counts more than a bit of devaluation

 

[bcworld]

Interesting para in an article in the Australian:

“Neither Qatar nor Virgin would answer questions about whether the Australian airline’s reward points will shift over to the Avios program used by its Doha suitor if the takeover deal is approved.”

Hmmmm

It was simply a brain fart by the journalist...not surprised they'd ignore it...it was based on nothing.