Qatar in talks to take up to 20pc stake in Virgin

[RSVKanga]

Without Qatar providing oil to us and the world I'd be unable to drive my car yet alone how many industries would collapse without oil somewhere in the production transportation line required to make the business's run.
How'd the Qantas planes fly without oil?

You’re gravely twisting the argument with an issue that has absolutely nothing to do with the fairness of aviation competition in Australia.

Most airlines run their business on a commercial basis. Qatar Airways claims to run its business commercially, yet they have access to unlimited oil funds from their owner who is an autocratic non-capitalist state. This allows them to capacity dump and operate many loss making routes that other airlines aren’t capable of. Do you think Qatar Airways flies the almost empty MEL<>ADL<>MEL service with successful market performance? No, it’s a deeply loss making route with more than 95% of seats empty, but they can afford to fly those routes by tapping into their oil funds to offset their loss.

 

[MooTime]

You’re gravely twisting the argument with an issue that has absolutely nothing to do with the fairness of aviation competition in Australia.

Most airlines run their airlines on a commercial basis. Qatar Airways claims to run its business commercially, yet they have access to unlimited oil funds from their owner who is an autocratic non-capitalist state. This allows them to capacity dump and operate many loss making routes that other airlines aren’t capable of. Do you think Qatar Airways flies the almost empty MEL<>ADL<>MEL service with successful market performance? No, it’s a deeply loss making route with more than 95% of seats empty, but they can afford to fly those routes by tapping into their oil funds to offset their loss.

They more than make up for the tiny sub hour near empty flight ADL-MEL by flying full planes globally at fair average prices providing top end services in all cabins.
Something that our apparent national carrier simple doesn't provide any more.

Who'd not want a better airline to chose to fly with?

 

[Quickstatus]

Without Qatar providing oil to us

Australia does not buy oil from Qatar AFAIK. Oil imports mainly come from Asia. Rest from NW shelf I think

Qatar sells a lot of fertiliser to Australia though.

 

[justinbrett]

I think we’d be OK without Qatari oil.

Canada, US, UAE all much higher in the pecking order compared to Qatar.

List of countries by proven oil reserves - Wikipedia

en.wikipedia.org

 

[RooFlyer]

which draws to the last few thousand posts on here on whether it is fair that government backed subsidised companies should be allowed to do this I guess.

Sure, but where does 'fairness' impact?

For the consumer, they might not care how cheaper airfares from government backed airlines come about - they'll think it's "fair enough".

For rival airlines, yes, they'd scream "unfair" (and have ). Legislation does outlaw unfair competition and 'capacity dumping' so there is a limit. But legislation also tends to protect the consumer, not the corporates. So as long as the government-backing subsidy isn't passed disproportionately into the market-place, it shouldn't be a problem (beyond outright political decisions).

If, for instance, QR connived to supply VA with 'cheap' aircraft leasing - and it may be as subtle as lending a balance sheet guarantee for financing - then as long as the competition using those aircraft (Australian airfares) isn't unfair, as determined by the statutory authorities, then it shouldn't be a problem.

More broadly on competition by state-owned companies (and this occurs in many sectors, not just aviation, ahem, China) QR has been operating in the Australian market for a long time. I fly and will be flying them long-haul, as well as Qantas, SQ, LH and AY. I always get my TA to give me various options across the airlines for a particular trip. In spite of the comical portrayal of QR as some petro-dollar spewing Godzilla, their airfares are pretty well balanced in the market, as shown a while back in another thread, and my own experience every trip pricing. So its not their pricing that is 'unfair', or potentially VA3's. What may be unfair is that QR, SQ and certain others provide a high quality flying experience for about the same price as their competitors. I'm afraid in that case, some will just have to deal with it.

 

[RSVKanga]

Sure, but where does 'fairness' impact?

The image of Australia on the world stage?

I assume you’re an Australian citizen, so would you not be embarrassed if your country doesn’t have a national carrier because it mistakenly allowed a massive corporation with unlimited sovereign funds from their owner who is an oil-rich non-capitalist dictatorship to compete with QF en masse (on multiple fronts with this VA stake) and muscle QF out?

Others have pointed out that airfares right now are where they should be, and I think any further advocating of substantially lower airfares is more leaning towards being selfish and myopic, considering the severe consequences to our country in the long run if QR is the one “lowering airfares” - airfares that QR could increase dramatically if QF is muscled out. Not just QF but even other airlines that could be taken out in the crossfire.

the government-backing subsidy

So you do admit that Qatar Airways gets unlimited funds (oil) from its owner which is an autocratic government. Unsure why you tried to deny this and said that “Qatar Airways is run commercially” in your earlier posts.

 

[RooFlyer]

Oh, good Lord.

 

[HS-TQE]

Here we go again...

 

[simmomelb]

Here we go again...

Yeah it's all getting a little tiring, talk about flogging a dead horse.

 

[justinbrett]

Perhaps let’s just wait to see if these “talks” eventuate, let alone approval. And all the other things speculated here that would lead to Armageddon.

Or more likely it’s a nothing burger and best case is VA2 resembles something closer to VA1. Even that is a stretch.

 

[MooTime]

Yeah it's all getting a little tiring, talk about flogging a dead horse.

Or potentially a dead roo....as is being floated.

 

[RSVKanga]

QR won’t leak or discuss anything

Then how do we know that QR is seeking a 20% stake in Virgin Australia before they make the formal announcement (which is expected next week).

TBH I’d say QR is one of the worst when it comes to keeping things close to their chest.

 

[HS-TQE]

Perhaps let’s just wait to see if these “talks” eventuate, let alone approval. And all the other things speculated here that would lead to Armageddon.

Or more likely it’s a nothing burger and best case is VA2 resembles something closer to VA1. Even that is a stretch.

Agreed. Could be a good chance that QR may end up the 'next SQ' in the 'will they or won't they TAEK OVAH ?!?!"

This time next year, Qatar may join Singapore in the "tyre-kickers" club when it comes to discussions of a stake in Virgin.

Until there is news that there is pens being to paper or formal presser between the two CEOs (as in Qatar and Bain Capital), it's stuck in the speculation stage.

 

[oz_mark]

You’re gravely twisting the argument with an issue that has absolutely nothing to do with the fairness of aviation competition in Australia.

Most airlines run their business on a commercial basis. Qatar Airways claims to run its business commercially, yet they have access to unlimited oil funds from their owner who is an autocratic non-capitalist state. This allows them to capacity dump and operate many loss making routes that other airlines aren’t capable of. Do you think Qatar Airways flies the almost empty MEL<>ADL<>MEL service with successful market performance? No, it’s a deeply loss making route with more than 95% of seats empty, but they can afford to fly those routes by tapping into their oil funds to offset their loss.

You need to look at the overall flight. I would postulate that the overall Doha-Melboune-Adelaide service is not the loss making exercise being made out here.

 

[oz_mark]

Qatar Airways apparently want to fly PER-LHR and JNB-SYD as seventh-freedom, nonstop routes in collaboration with VA if/when they get that 20% stake. It's that simple.

The consequences of this plan to Australia's economic sovereignty, prosperity and national interest are outlined in the posts above.

I can't see that buying a 20% stake in VA is suddenly going to allow them to operate those services. Perhaps VA may operate them, but QR won't be (except perhaps as some leasing operation, but then they'd still be VA flights)

 

[RSVKanga]

You need to look at the overall flight. I would postulate that the overall Doha-Melboune-Adelaide service is not the loss making exercise being made out here.

The issue here is quite simple.

QR’s unlimited oil funds allow them to offset the deep loss on that MEL-ADL-MEL service.

Qantas, who don’t have access to sovereign oil payments from a dictatorship state owner, can’t do this. A very good example of this is them not being able to successfully fly their LAX-JFK-LAX service which actually had loads that were much larger than QR’s MEL-ADL-MEL flight.

 

[Quickstatus]

would you not be embarrassed if your country doesn’t have a national carrier

No

 

[jase05]

I assume you’re an Australian citizen, so would you not be embarrassed if your country doesn’t have a national carrier because it mistakenly allowed a massive corporation with unlimited sovereign funds from their owner who is an oil-rich non-capitalist dictatorship to compete with QF en masse (on multiple fronts with this VA stake) and muscle Q

Absolute rubbish. QF will always be top dog in this country and a little airline that has just 20% foreign ownership by QR isn’t going to change this much at all.

 

[HS-TQE]

I can't see that buying a 20% stake in VA is suddenly going to allow them to operate those services. Perhaps VA may operate them, but QR won't be (except perhaps as some leasing operation, but then they'd still be VA flights)

Also the bilaterals between countries may vary. Japan for example doesn't allow wet-leases to Haneda as one example, leading to VA's CNS-HND service (subsidised in partnership with the Queensland Government, NQ Tourism and Cairns Airport).

 

[oz_mark]

The issue here is quite simple.

QR’s unlimited oil funds allow them to offset the deep loss on that MEL-ADL-MEL service.

Qantas, who don’t have access to sovereign oil payments from a dictatorship state owner, can’t do this. A very good example of this is them not being able to successfully fly their LAX-JFK-LAX service which actually had loads that were much larger than QR’s MEL-ADL-MEL flight.

No. it's not their deep pockets that allow them to run MEL-ADL, it's the profitability of the Doha-Melbourne sector that makes it worthwhile.