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

[RooFlyer]

My point exactly. They need some Australian money if they want to expand international services.

it will be pretty obvious what QR are up to if they gift VA some widebodies to fly to DOH.

Totally agree; then it comes down to whether or not the consequence is a bad thing or not. I'd love it to happen, although I think 'gifting' isn't likely.

Would the Treasurer block the sale of say 20% to QR on the basis "QR might manoeuvre to cause a majority Australian airline (or Australian + Bain, who seem to be OK) to provide more overseas services on the way to Europe"?

I’ll just say that sometimes, Australia’s national interest, economic sovereignty and prosperity, which includes the profitability of Australian-owned airlines, is more important than the price of airfares (which are already down a whopping 13% since last year) and the individual Avios/Velocity FF points balances of a few citizens.

OK - but can you provide us an example of how the national interest, yada yada yada would be impacted by lower airfares and the individual Avios/Velocity FF points balances of a few citizens?

 

[justinbrett]

Would the Treasurer block the sale of say 20% to QR on the basis "QR might manoeuvre to cause a majority Australian airline (or Australian + Bain, who seem to be OK) to provide more overseas services on the way to Europe"?

You seem to keep implying QR and Bain should be treated the same as both are foreign.

One is a holding company, the other is controlled by a foreign government. Also not to beat around the bush, one is American and the other is Qatari.

All this talk of QR getting de facto control is exactly what will kill the sale; better to structure it that QR is a mere minority investor who is along for the ride, then it might go through.

 

[drron]

According to our resident QF guru airfares have come down a “whopping “ 13% already. Only problem they went up a massive 50% post Covid.
They have to drop a fair bit more before I call it a massive drop. Bring on the competition.

 

[MARTINE]

I’ll just say that sometimes, Australia’s national interest, economic sovereignty and prosperity, which includes the profitability of Australian-owned airlines, is more important than the price of airfares (which are already down a whopping 13% since last year) and the individual Avios/Velocity FF points balances of a few citizens.

Suggest you lobby the govt to put QF back into Commonwealth ownership to meet your checklist with subsidies to keep them ‘profitable’…

 

[justinbrett]

According to our resident QF guru airfares have come down a “whopping “ 13% already. Only problem they went up a massive 50% post Covid.
They have to drop a fair bit more before I call it a massive drop. Bring on the competition.

The price of milk went up 30% in that time, amongst many other things. I don’t think they’ll be dropping much more than they already have, which seems to be the consensus at the recent IATA conference (this is not an issue specific to Australia)

 

[burmans]

The price of milk went up 30% in that time, amongst many other things. I don’t think they’ll be dropping much more than they already have, which seems to be the consensus at the recent IATA conference (this is not an issue specific to Australia)

I’d agree with your analysis but not sure that’s the real point, this was more a return to a (new) normal after an unprecedented event rather than a massive drop.

 

[RooFlyer]

You seem to keep implying QR and Bain should be treated the same as both are foreign.

One is a holding company, the other is controlled by a foreign government. Also not to beat around the bush, one is American and the other is Qatari.

All this talk of QR getting de facto control is exactly what will kill the sale; better to structure it that QR is a mere minority investor who is along for the ride, then it might go through.

No, I'm not trying to imply they would or should be treated the same - please look at my post #70. And I've acknowledged the hurdle of the Treasurer ultimately making a decision not based on what FIRB may recommend, which obviously includes political sensitivities. So lets put all that to bed, shall we, else we'll be going round in circles again.

(As an aside, there was a situation here in Tas a few years ago which is somewhat similar. The Van Diemen's Land Company, with very large and rich agricultural holdings, been around since colonial days, was put up for sale. It had always been owned by the Brits. They wanted to sell to the Chinese. Huge local stink about the place being sold to the Chinese, who had and still have a very bad record of management of other ag assets they have bought here. FRIB and the then Treasurer approved it, with conditions. In part the decision read

VDL is currently a foreign owned company that has always been owned by foreign residents.
In forming my view I have carefully considered the national interest test and how it applies to this case, including the likely impact on local jobs and increased investment to support economic growth. In particular, the national interest test requires consideration of the impact on taxation revenue.

As I said, only similar but approval to politically difficult foreign entities of is not impossible, but will probably come with additional strings attached. )

Of course de facto control could be an issue, politically! The Treasurer may approve the investment and mandate no foreign entity could have more than one board seat, or have seats only in proportion to their investment. Or, as you say, the Treasurer may spike the investment, but that would come with possible downside for the Government, if Bain was keen on selling to QR (say, if QR was offering an attractive buy-in arrangement) and then Bain made it know that a refusal would make things difficult for them to keep supporting Virgin.

As for a simple minority investor - again, sure, maybe possible, as they have minority investments in other airlines and entities. But maybe this is more along the lines of what they are thinking now.

After 5 Years: Qatar Airways Close To Buying A Stake In RwandAir

 

[drron]

But it would have been better if the FIRB hadn’t approved the Chinese takeover as it didn’t end well but now back in Aussie hands.

Tasmanian farm the size of Gibraltar sells for $15m in 'good deal' for management fund - ABC News

amp.abc.net.au

 

[justinbrett]

I’d agree with your analysis but not sure that’s the real point, this was more a return to a (new) normal after an unprecedented event rather than a massive drop.

That was my point. There has been a lot of inflation economy wide, so if you consider the rise and fall of airfares, we’re about where they should be.

 

[RooFlyer]

But it would have been better if the FIRB hadn’t approved the Chinese takeover as it didn’t end well but now back in Aussie hands.

Tasmanian farm the size of Gibraltar sells for $15m in 'good deal' for management fund - ABC News

amp.abc.net.au

Unfortunately that sale was only part of the VDL co acreage then - Mr Lu essentially broke the farm up.

 

[RSVKanga]

OK - but can you provide us an example of how the national interest, yada yada yada would be impacted by lower airfares and the individual Avios/Velocity FF points balances of a few citizens?

Advocating for lower airfares at a time when prices are where they should be (as others in this thread have pointed out) is not only a selfish approach, but also myopic as prices will increase dramatically once QR muscles out our national carrier on some routes.

It’s being reported that QR have intentions to fly routes such as PER-LHR and SYD-JNB in partnership with VA if they get this stake. Those routes have absolutely nothing to do with QR geography wise and is hence a direct threat to our national interest and economic sovereignty as an oil rich autocratic state-owned airline will be flying/co-ordinating routes from Australia to countries that they ideally should have no role in. Those routes are flown by our Australian-owned national carrier, and could be under threat. If QR muscles QF out with their unfair advantage, prices will undoubtedly soar.

It would be ridiculous for an airline like Japan Airlines wanting to fly SYD-LAX, right?

It would be ridiculous for an airline like AA to fly SYD-BLR, right?

…..just like how it would be ridiculous for an airline like QR to fly PER-LHR and SYD-JNB. Even JL and AA above are private firms from capitalist democracies, QR is owned by an autocratic regime with unlimited oil funds. So not only is QR flying PER-LHR and SYD-JNB ridiculous, it’s also a grave threat to our national interest and economic sovereignty and prosperity as a nation.

Also, VA tickets could be dirt cheap domestically and put real unfair pressure on QF. No, this is not “market forces”, this is unlimited oil funds eroding the principles of supply, demand, profit and loss in our market economy.

 

[PERLHR]

See there is some reports saying that

Advocating for lower airfares at a time when prices are where they should be (as others in this thread have pointed out) is not only a selfish approach, but also myopic as prices will increase dramatically once QR muscles out our national carrier on some routes.

It’s being reported that QR have intentions to fly routes such as PER-LHR and SYD-JNB in partnership with VA if they get this stake. Those routes have absolutely nothing to do with QR geography wise and is hence a direct threat to our national interest and economic sovereignty as an oil rich autocratic state-owned airline will be flying/co-ordinating routes from Australia to countries that they ideally should have no role in. Those routes are flown by our Australian-owned national carrier, and could be under threat. If QR muscles QF out with their unfair advantage, prices will undoubtedly soar.

It would be ridiculous for an airline like Japan Airlines wanting to fly SYD-LAX, right?

It would be ridiculous for an airline like AA to fly SYD-BLR, right?

…..just like how it would be ridiculous for an airline like QR to fly PER-LHR and SYD-JNB. Even JL and AA above are private firms from capitalist democracies, QR is owned by an autocratic regime with unlimited oil funds. So not only is QR flying PER-LHR and SYD-JNB ridiculous, it’s also a grave threat to our national interest and economic sovereignty and prosperity as a nation.

Also, VA tickets could be dirt cheap domestically and put real unfair pressure on QF. No, this is not “market forces”, this is unlimited oil funds eroding the principles of supply, demand, profit and loss in our market

 

[elanshin]

Advocating for lower airfares at a time when prices are where they should be (as others in this thread have pointed out) is not only a selfish approach, but also myopic as prices will increase dramatically once QR muscles out our national carrier on some routes.

It’s being reported that QR have intentions to fly routes such as PER-LHR and SYD-JNB in partnership with VA if they get this stake. Those routes have absolutely nothing to do with QR geography wise and is hence a direct threat to our national interest and economic sovereignty as an oil rich autocratic state-owned airline will be flying/co-ordinating routes from Australia to countries that they ideally should have no role in. Those routes are flown by our Australian-owned national carrier, and could be under threat. If QR muscles QF out with their unfair advantage, prices will undoubtedly soar.

It would be ridiculous for an airline like Japan Airlines wanting to fly SYD-LAX, right?

It would be ridiculous for an airline like AA to fly SYD-BLR, right?

…..just like how it would be ridiculous for an airline like QR to fly PER-LHR and SYD-JNB. Even JL and AA above are private firms from capitalist democracies, QR is owned by an autocratic regime with unlimited oil funds. So not only is QR flying PER-LHR and SYD-JNB ridiculous, it’s also a grave threat to our national interest and economic sovereignty and prosperity as a nation.

Also, VA tickets could be dirt cheap domestically and put real unfair pressure on QF. No, this is not “market forces”, this is unlimited oil funds eroding the principles of supply, demand, profit and loss in our market economy.

I'd agree this would be a "nightmare" scenario if QR was in 100% or even significant majority controlling stake of VA.

But if its a 20% cornerstone investor, what is the other 80% going to do? Sit there and eat the losses for years on end whilst the airlines wager a war and go yep, we'll happily lose our money because we also have unlimited oil money?

No they'd have found a way to force QR to stop bleeding their money.

It's why I don't expect QR to make a play for more than 20% and why they probably won't try more because they would be blocked from doing so by the government.

 

[PERLHR]

But it's ok for EK to operate between New Zealand and Australia and New York Milan? It's ok for KLM to operate South American services? It's ok for Singapore to Fly from Manchester to New York. There are many more.

Also VA will unless I am mistaken remain an Australian carrier.

Fares in Australia are simply over priced. And QF have taken us all for a ride long enough in that department.

 

[MARTINE]

Advocating for lower airfares at a time when prices are where they should be (as others in this thread have pointed out) is not only a selfish approach, but also myopic as prices will increase dramatically once QR muscles out our national carrier on some routes.

It’s being reported that QR have intentions to fly routes such as PER-LHR and SYD-JNB in partnership with VA if they get this stake. Those routes have absolutely nothing to do with QR geography wise and is hence a direct threat to our national interest and economic sovereignty as an oil rich autocratic state-owned airline will be flying/co-ordinating routes from Australia to countries that they ideally should have no role in. Those routes are flown by our Australian-owned national carrier, and could be under threat. If QR muscles QF out with their unfair advantage, prices will undoubtedly soar.

It would be ridiculous for an airline like Japan Airlines wanting to fly SYD-LAX, right?

It would be ridiculous for an airline like AA to fly SYD-BLR, right?

…..just like how it would be ridiculous for an airline like QR to fly PER-LHR and SYD-JNB. Even JL and AA above are private firms from capitalist democracies, QR is owned by an autocratic regime with unlimited oil funds. So not only is QR flying PER-LHR and SYD-JNB ridiculous, it’s also a grave threat to our national interest and economic sovereignty and prosperity as a nation.

Also, VA tickets could be dirt cheap domestically and put real unfair pressure on QF. No, this is not “market forces”, this is unlimited oil funds eroding the principles of supply, demand, profit and loss in our market economy.

Welcome to capitalism

 

[HS-TQE]

It would be ridiculous for an airline like Japan Airlines wanting to fly SYD-LAX, right?

Singapore tried for ages to apply for 5th freedom SYD-LAX back in the day (when it was a Qantas/United duopoly) before V-Australia emerged (later in partnership with Delta Air Lines).

 

[RooFlyer]

It’s being reported that QR have intentions to fly routes such as PER-LHR and SYD-JNB in partnership with VA if they get this stake.

Crikey ... oh, sure.

It would be ridiculous for an airline like Japan Airlines wanting to fly SYD-LAX, right?
It would be ridiculous for an airline like AA to fly SYD-BLR, right?

Sort of like Qantas's pal Emirates flying Miami to Bogota, right? Ridiculous Or Milan to JFK? Silly. Or Barcelona To Mexico City? Laughable.

Emirates Fifth-Freedom Routes

Dubai-based Emirates is one of the world's largest users of fifth-freedom flights.

www.australianfrequentflyer.com.au

 

[RSVKanga]

But it's ok for EK to operate between New Zealand and Australia and New York Milan? It's ok for KLM to operate South American services? It's ok for Singapore to Fly from Manchester to New York. There are many more.

You're gravely confusing between fifth-freedom and seventh-freedom flights, which are competely different. What you've listed above are all fifth freedom services, and make geographical sense. eg EK flying from Dubai to New York via Milan.

Qatar Airways operating PER-LHR and SYD-JNB would be seventh-freedom services that don't make any sense at all in terms of the country Qatar. They won't originate or terminate in DOH. So yes, it would be a threat to Australia's economic sovereignty, given QR's ownership structure, oil funds and them competing with our Australian-owned national carrier on routes irrelevant to them.

Welcome to capitalism

Capitalism involves fair market forces playing a part in determining that the market decides. Since QR's owner is an autocratic non-capitalist regime with unlimited oil funds, it's more of an assault on capitalism rather than an endorsement of it if QR buys VA 20% and the above scenario happens.

Post automatically merged: Friday at 8:47 PM

Sort of like Qantas's pal Emirates flying Miami to Bogota, right? Ridiculous Or Milan to JFK? Silly. Or Barcelona To Mexico City? Laughable.

Again, another person gravely confusing fifth-freedom with seventh-freedom routes. See above.

 

[PERLHR]

You're gravely confusing between fifth-freedom and seventh-freedom flights, which are competely different, What you've listed above are all fifth freedom services, and make geographical sense. eg EK flying from Dubai to New York via Milan.

Qatar Airways operating PER-LHR and SYD-JNB would be seventh-freedom services that don't make any sense at all in terms of the country Qatar. They won't originate or terminate in DOH.


View attachment 393126




Capitalism involves fair market forces playing a part in determining that the market decides. Since QR's owner is an autocratic non-capitalist regime with unlimited oil funds, it's more of an assault on capitalism rather than an endorsement of it if QR buys VA 20% and the above scenario happens.

Post automatically merged: Friday at 8:47 PM

Again, another person gravely confusing fifth-freedom with seventh-freedom routes. See above.Ilan to NYC or Manchester to NYC seems to me 7th freedom...not touching home terrotort

. Pax can buy these tickets without having to touch home base of SQ or EK. But maybe I have it all wrong. You never know maybe PER to LHR will route via DOH!

 

[MARTINE]

Capitalism involves fair market forces playing a part in determining that the market decides. Since QR's owner is an autocratic non-capitalist regime with unlimited oil funds, it's more of an assault on capitalism rather than an endorsement of it if QR buys VA 20% and the above scenario happens.

If the market decides then I suppose ‘fair’ is in the eye of the beholder. Not saying right or wrong just its not binary or simple as stated.