Qatar Airways to acquire 25% of Virgin Australia

[justinbrett]

If there was zero chance of switching to Avios, wouldn’t they say so when asked by a journo rather than refuse to answer, even by saying something vague like “we have no plans”?

Why answer a question that you don’t have to? Keep your opponents guessing.

 

[ben95]

The treasurer has said on ABC yesterday regarding the Qatar acqusition that "people should expect to see that decision quite soon, ideally this week".

 

[RooFlyer]

Now approved by the Treasurer - from the AFR app. Hooray!



EDIT: Now a link off the AFR web site

ASX 200 LIVE: ASX to slip, Qatar gets approval to buy Virgin stake, Qantas results awaited

Australian share futures turned negative after the US president reiterated his tariff-driven trade agenda. Qantas results pending. Follow updates here.

www.afr.com

 

[markis10]

Great timing - about 30 minutes before QF results come out

 

[RooFlyer]

Some of the conditions (from AFR article, above)

Chalmers said the airlines had committed to “a structured secondment program, placing 20 pilots and 40 cabin crew in Doha in 2025 to gain long-haul flying experience, while creating at least 60 backfill positions in Australia”.

They have also agreed to explore potential “dry lease” options, where Virgin Australia leases its own aircraft and provides its own crew, to begin no later than three years into the partnership and an assurance to unions that any future dry lease arrangements will utilise Australian-based labour.

“The proposal is also expected to deliver broader economic benefits including more job creation in Australia, support for the tourism industry and enhancing Australia’s position as a key travel hub,” Chalmers said.

 

[Saab34]

Agreed to ‘explore’

Funny.

 

[p--and--t]

Was interesting hearing pilots union chief saying part of the obligations of V2.0 was to re-establish international capability. So.there was a driver there to seriously make something happen (besides HND debacle).

 

[ben95]

Agreed to ‘explore’

Funny.

I mean it’s always going to be “explore” because you don’t necessarily want a repeat of VA1.0 but at the same time you don’t want VA/QR to do nothing and just sit on the wet lease forever.

Should the government be unhappy with the outcome of the exploration (say when there’s clearly a business case for it but VA refuses) then there’s action the government can take to “incentivize” them.

 

[justinbrett]

So not surprising it wasn't a binary decision but a question of what conditions were imposed.

I've got to say I'm surprised how much the wet lease is entangled in the acquisition - by rights they are mutually exclusive - a FIRB approval and wet lease DOH capacity denied, or FIRB denial but DOH capacity approved. Sounds like QR wanted an all or nothing deal and structured it this way. The condition on 3 years to get a dry lease is interesting, sounds like the government is saying you won't get another 5 - so you've got 3 years to make a decision and then 2 years to transition to a dry lease.

The bit about customers data is interesting (although I guess not surprising) - I assume QR will be blocked from VA customer data except for what is operationally required and/or QR has to show how they won't share data with the state of Qatar (a la TikTok/China).

 

[RooFlyer]

The condition on 3 years to get a dry lease is interesting, sounds like the government is saying you won't get another 5 - so you've got 3 years to make a decision and then 2 years to transition to a dry lease.

From well up thread:

Sure, and if the VA/QR wet lease was proposed to be forever, I would be against it. A couple of years, like Qantas would seem appropriate.

No, I’m not advising the Treasurer

The bit about customers data is interesting (although I guess not surprising) - I assume QR will be blocked from VA customer data except for what is operationally required and/or QR has to show how they won't share data with the state of Qatar (a la TikTok/China).

Yes, interesting. QR will almost certainly have board members or board members nominated by them and there will inevitably going to be be a lot of data in the board meeting notes. As you suggest, an undertaking by those people not to use the data outside proper purpose should be enough

 

[justinbrett]

Yes, interesting. QR will almost certainly have board members or board members nominated by them and there will inevitably going to be be a lot of data in the board meeting notes. As you suggest, an undertaking by those people not to use the data outside proper purpose should be enough

There was the condition for board member residency (must be Australian).

Doesn't clarify if they mean QR's representatives (like what FJ does to QF), or just that the VA board in total must have a certain percentage of Australians. (standard rule is 2 out of 3 must be Aussie) - but I'm not sure that would be a condition as it is a standard rule.

QR is a bit of an outlier in having Qatari CEOs - EK has a Brit, EY has a Kenyan (Brit before that, Aussie before that), RX a Brit (the same Brit from EY). Obviously a CEO is different to a board member (although usually gets a seat) just an observation that Qatar as been a bit more insular when it comes to appointments. Definitely doesn't work here though, VA must be seen to be an Australian airline being run by Australians or it will never succeed.