Virgin Australia and Qatar Airways tie-up a done deal as ACCC clears runway for take-off

Virgin Australia and Qatar Airways have been cleared for take-off with a partnership that will double the number of weekly flights between four key national gateways and Doha in the Middle East.

The two airlines were granted final approval from the Australian Competition and Consumer Commission on Friday for a five-year tie-up that will allow Virgin to use Qatar aircraft and crew to operate the new services under a so-called “wet lease” arrangement.

The extra 28 non-stop return services will start in mid-June and run daily from Perth, Brisbane and Sydney to Hamad International Airport, with a Melbourne service due to start in December.

For Virgin, it marks a return to long-haul international flying after it was bought out of administration by Bain Capital more than four years ago.

For Qatar, the ACCC’s approval will give it greater access to the Australian market — with 100 connecting itineraries out of Doha — after the Federal Government in 2023 denied its application to operate another 28 weekly flights following strong opposition from Virgin’s rival, Qantas.

Newly installed Virgin boss and former Bain Capital veteran Dave Emerson — who only took over from Jayne Hrdlicka on March 14 — described it as a is a defining moment for Virgin Australia and the Australian aviation landscape.

“Already, we are seeing some of the positive benefits of the partnership, including increased sale activity on airfares between Australia and Europe, the Middle East and Africa thanks to increased competition,” Mr Emerson said.

“We are pleased to welcome Qatar Airways as not just a strategic partner, but a part owner in Virgin Australia. This reflects a huge vote of confidence from a leading global airline in our business and in Australian aviation more broadly.”

Virgin and Qatar started selling tickets late last year after the ACCC gave them an initial green light with strict consumer protection measures in place if it ultimately ruled against the alliance.

But ACCC commissioner Anna Brakey said on Friday the partnership would boost international capacity with little to no public detriment and help to bring down airfares.

“This will likely place downward price pressure on these routes and will also give customers of Virgin Australia and Qatar Airways a greater choice of international flights with additional connectivity and loyalty program benefits,” Ms Brakey said.

The nod from the consumer watchdog comes just weeks after Treasurer Jim Chalmers and the Foreign Investment Review Board gave their blessing to the Gulf carrier taking a 25 per cent stake in privately owed Virgin.

There are also specific consultation conditions with aviation unions which had opposed the tie-up.

In its final ruling, the ACCC brushed aside their fears that Australian jobs would be sent to a low-pay, low-protection jurisdiction under the wet-lease arrangement.

Virgin will be required to work towards “dry lease” arrangements within three years, where its own staff and planes it leases are used on the Doha routes. The airlines have already committed to a secondment program that will place 20 Virgin pilots and 40 cabin crew in Doha to gain long-haul flying experience and create backfill positions in Australia.

Ms Brakey said it was unlikely that Virgin or any other Australian airline would start services to Doha on a standalone basis in the next five years if the deal was not approved.

“As such, we consider it unlikely that the conduct will result in a material detrimental impact on the Australian aviation workforce,” she said.

The watchdog also dismissed concerns about exclusivity between the airlines, saying Virgin’s Velocity Frequent Flyer members would continue to be able to earn and redeem points on Singapore Airlines services operated globally, including on services to and from Europe, the Middle East and Africa.

The extra service will lift current capacity between Perth and Doha by 37 per cent, making more than 500,000 seats available between the cities each year.