Virgin Australia and Qatar Announce Strategic Partnership

[FlyingKangaroo]

I’ll honestly be surprised if this deal passes ACCC scrutiny. Surely having a major airline like Qantas gobble up the competition is a no-no?

Qantas isn't gobbling up anyone, and if you meant Qatar, Qatar and VA are hardly competitors?

 

[Must...Fly!]

I've been pondering the Avios question for most of the day. I don't think it's going to happen. It's a world away from the rest of the Avios infrastructure, and VFF and Velocity points as a whole are a very well known local product. There is significant value in these staying in the market as their own currency. There is little in the way of reasons to adopt Avios for any party, imo.

 

[twinaisle]

Velocity will most likely remain as is and unchanged. It's a very profitable operation.

 

[RooFlyer]

I still doubt Avios will be an option, but perhaps VA to QR transfer with a penalty rate (like VA to SQ now) making it possible but not necessarily good value.

I think that would be a great arrangement and perhaps the easiest to implement, if they did want the 2 FF schemes to interact.

Not necessarily good value in the widest sense, but can be good value if you are a bit short in one currency and have surplus in the other. et voila - an award is now bookable. Have done this several times for SQ - got tons of Velocity points, no international use for them (for me), so whack 'em over to SQ and I'm away. The loss on transfer is soon made up.

 

[justinbrett]

I think that would be a great arrangement and perhaps the easiest to implement, if they did want the 2 FF schemes to interact.

Not necessarily good value in the widest sense, but can be good value if you are a bit short in one currency and have surplus in the other. et voila - an award is now bookable. Have done this several times for SQ - got tons of Velocity points, no international use for them (for me), so whack 'em over to SQ and I'm away. The loss on transfer is soon made up.

The trouble unlike the other QR investments, VA isn’t in oneworld and has many *A partners. So there’s competing interests there.

Getting too close to QR/Avios means giving business to the direct competitors of many of VA partners (AA/AS instead of UA, BA instead of VS, JL instead of NH, CX/MH instead of SQ, and even 4Z instead of SA).

It’s a very awkward situation. If VA points can be redeemed for QR metal but not other oneworld, that seems like it ticks all the boxes. What’s the motivation for anything more?

 

[jase05]

It’s a very awkward situation. If VA points can be redeemed for QR metal but not other oneworld, that seems like it ticks all the boxes. What’s the motivation for anything more?

Agree on that and I don’t think it would work as things currently stand but who knows what the future holds. I think things will look very different in the future

 

[PERLHR]

The trouble unlike the other QR investments, VA isn’t in oneworld and has many *A partners. So there’s competing interests there.

Getting too close to QR/Avios means giving business to the direct competitors of many of VA partners (AA/AS instead of UA, BA instead of VS, JL instead of NH, CX/MH instead of SQ, and even 4Z instead of SA).

It’s a very awkward situation. If VA points can be redeemed for QR metal but not other oneworld, that seems like it ticks all the boxes. What’s the motivation for anything more?

I suppose one needs to analyse if FF points and their use are actually "supporting the competition". Maybe it's actually the opposite...taking away a revenue paid seat opportunity? I'm not even sure if airlines within their books consider FF use? I guess they do but what value they put against it I'm not sure. The drawback could be I guess that one likes the service of say One World operator over previously used Star Alliance and then decides to pay for using One World in future. For me as example, I convert VA to SQ and fly SQ however as I am really one world junky, I don't ever buy SQ without using VA points.

 

[justinbrett]

I suppose one needs to analyse if FF points and their use are actually "supporting the competition". Maybe it's actually the opposite...taking away a revenue paid seat opportunity? I'm not even sure if airlines within their books consider FF use? I guess they do but what value they put against it I'm not sure. The drawback could be I guess that one likes the service of say One World operator over previously used Star Alliance and then decides to pay for using One World in future. For me as example, I convert VA to SQ and fly SQ however as I am really one world junky, I don't ever buy SQ without using VA points.

No, that’s just plain wrong.

If QR Avios are used on another oneworld airline, money changes hands. The other airlines benefit (they’re not giving away seats for charity). If it’s two ways then perhaps it cancels out but there’s a monetary value to it.

SQ has been different as they align with many of VA’s other partners (especially now it’s UA and not DL).

 

[RooFlyer]

The trouble unlike the other QR investments, VA isn’t in oneworld and has many *A partners. So there’s competing interests there.

I don't think competing interests has troubled QR in the past.

Getting too close to QR/Avios means giving business to the direct competitors of many of VA partners (AA/AS instead of UA, BA instead of VS, JL instead of NH, CX/MH instead of SQ, and even 4Z instead of SA).

Remains to be seen if the list of VA partners remains static if the buy-in goes through. Maybe some of the other partners may not wish to continue with a QR quasi-controlled airline anyway. We dunno.

It’s a very awkward situation. If VA points can be redeemed for QR metal but not other oneworld, that seems like it ticks all the boxes. What’s the motivation for anything more?

Award availability may be one (QR should give its PC members preferential access). With SQ/VA there are different availabilities on SQ, so I always book with SQ direct using their miles, many sourced from my Velocity account. But then the airlines may not see it my way.

Yes, it got awkward when VA and QR partnered in the first place!

Honestly, my cheering for the QR investment isn't so much around award availabilities or the extent of partnerships (little interest to me) but the fact that we'll get a more robust and capable second domestic airline, more able to really compete with Qantas. Any better experiences on the international flight/award front will be a bonus for me.

 

[HS-TQE]

No, that’s just plain wrong.

If QR Avios are used on another oneworld airline, money changes hands. The other airlines benefit (they’re not giving away seats for charity). If it’s two ways then perhaps it cancels out but there’s a monetary value to it.

SQ has been different as they align with many of VA’s other partners (especially now it’s UA and not DL).

SQ and UA always hasn't gotten along either. They've only recently started to co-operate in recent years, similar to the 'improved' QF/CX relationship that was frosty a few years ago.

There's a reason why SQ was always reported in the media of "considering another attempt to apply for 5th freedom" flights from SYD to LAX before they acquired their ill-fated loss making stake in DJ (VA), who at the time dumped UA for the JV stint with DL through their newly formed V Australia long haul subsidiary.

 

[justinbrett]

I don't think competing interests has troubled QR in the past.



Remains to be seen if the list of VA partners remains static if the buy-in goes through. Maybe some of the other partners may not wish to continue with a QR quasi-controlled airline anyway. We dunno.

Competing interests for VA. And yes your second paragraph details this - it’s either QR’s interest or VAs. The two are not completely aligned.

For want of a better analogy, VA is the mistress that will never fit in with QR’s family (oneworld), neither will QR fit in with VA’s patchwork of friends. Forbidden love.

 

[PERLHR]

No, that’s just plain wrong.

If QR Avios are used on another oneworld airline, money changes hands. The other airlines benefit (they’re not giving away seats for charity). If it’s two ways then perhaps it cancels out but there’s a monetary value to it.

SQ has been different as they align with many of VA’s other partners (especially now it’s UA and not DL).

I'm sure you are right..mostly. I don't claim knowledge of how airlines view or really operate FF programmes. However I think many did not see the likes of IB,AY, QR, albeit all one world join BA and AVIOS. Many here said the "buy in" with QR for VA would never get to the stage it now has. Infact many said will never go over 19 percent or 20 percent and now say "it's only 25 percent". So time will tell.

 

[justinbrett]

I'm sure you are right..mostly. I don't claim knowledge of how airlines view or really operate FF programmes. However I think many did not see the likes of IB,AY, QR, albeit all one world join BA and AVIOS. Many here said the "buy in" with QR for VA would never get to the stage it now has. Infact many said will never go over 19 percent or 20 percent and now say "it's only 25 percent". So time will tell.

I think you’re making too much of the Avios thing.

They’re still different programs. Having BA status gets you nothing on VA.

QF could peg 1 QFFP to the Avio and achieve the same thing. Ability to transfer between Avios programs is separate to the currency, and a common currency is not a requirement for such a facility.

Most airlines don’t want to allow transfers to other programs as they’d rather keep the points in their own ecosystem. It works for QR/BA etc as they are mostly oneworld and they don’t really compete with each other.

 

[andye]

Q z

I think you’re making too much of the Avios thing.

They’re still different programs. Having BA status gets you nothing on VA.

QF could peg 1 QFFP to the Avio and achieve the same thing. Ability to transfer between Avios programs is separate to the currency, and a common currency is not a requirement for such a facility.

Most airlines don’t want to allow transfers to other programs as they’d rather keep the points in their own ecosystem. It works for QR/BA etc as they are mostly oneworld and they don’t really compete with each other.

The arbitrage between the various Avios programme reward charts is great for the FF geek in me. A decent part of award redemption is about extracting the best value through more knowledge

 

[kangarooflyer88]

Qantas isn't gobbling up anyone, and if you meant Qatar, Qatar and VA are hardly competitors?

Sorry I mistyped the airline there I meant to say Qatar. I guess the concern would be whether the foreign ownership is in the national and consumer interest. Certainly, Qatar Airways has received a very icy reception from the Minister for Transport.

-RooFlyer88

 

[Daver6]

Sorry I mistyped the airline there I meant to say Qatar. I guess the concern would be whether the foreign ownership is in the national and consumer interest. Certainly, Qatar Airways has received a very icy reception from the Minister for Transport.

-RooFlyer88

VA is currently 100% in foreign ownership. Even previously it's been mainly foreign owned. So clearly not an issue at all.

 

[justinbrett]

VA is currently 100% in foreign ownership. Even previously it's been mainly foreign owned. So clearly not an issue at all.

Well it’s not 100%. Queensland own a few %.

But the point is more foreign state vs foreign private equity.

 

[HSB44]

Think of it from the other angle too... I imagine that Coles is happy with the QR link and new routes. Not sure if that gives VA / Bain the upper hand to negotiate a better deal with Fly buys?

 

[justinbrett]

Think of it from the other angle too... I imagine that Coles is happy with the QR link and new routes. Not sure if that gives VA / Bain the upper hand to negotiate a better deal with Fly buys?

The QR link isn’t new though. Not sure 4 extra flights would even be on their radar in the grand scheme of things.

The flybuys > velocity ratio is the same as woolies > QFF, so don’t expect any changes there. However given how many 10K/4 week promos flybuys run, it does suggest they’re getting them for cheap. Don’t expect any positive changes for the consumer, likely the contrary (ie fewer flybuys promos).