The ACCC has rubber-stamped Virgin Australia and Qatar Airways’ application to allow them to engage in cooperative conduct under an integrated alliance for five years.
The deal will see a doubling of the frequency of flights between Doha and major Australian airports with the two airlines commencing 28 new weekly return services between Doha and the major airports in Sydney, Melbourne, Brisbane and Perth. Virgin Australia will use Qatar Airways’ aircraft and crew to operate the new services under a ‘wet lease’ arrangement.
The new services will be in addition to the international services already operated by Qatar Airways.
“We consider that the conduct is likely to result in public benefits such as adding additional capacity on flights between Australia and the Middle East and is likely to result in minimal, if any, public detriment,” ACCC Commissioner Anna Brakey said.
“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.”
Today’s news follows an interim authorisation in November 2024 to enable the marketing and sale of the new Australia-Doha services as well as a draft determination released in February.
The majority of submissions from interested parties after the draft determination were in support of authorisation. However, some interested parties raised concerns that the wet lease arrangement undercuts Australian aviation jobs.
“We consider it unlikely that Virgin Australia or any other Australian airline would commence operating Australia-Doha services on a stand-alone basis in the next five years, even if the conduct was not authorised,” Brakey continued.
“As such, we consider it unlikely that the conduct will result in a material detrimental impact on the Australian aviation workforce.”
While concerns were also raised by some interested parties that the conduct could reduce Virgin Australia’s ability to enter into partnerships with other airlines, the applicants did not seek authorisation for proposed exclusivity arrangements.
These arrangements involve the applicants becoming each other’s exclusive interline, codeshare and loyalty partners headquartered in the Middle East or Türkiye and Australia.
While the exclusivity arrangements did not form part of the conduct for which authorisation was sought, the ACCC considered whether they were likely to result in public detriments causally connected to the conduct.
“We concluded that the overall impact of the exclusivity arrangements on consumers is likely to be minimal. This is because Velocity Frequent Flyer members will continue to be able to earn and redeem Velocity points on Singapore Airlines services operated globally, including on services to and from Europe, the Middle East and Africa,” Brakey said.
“Virgin Australia’s arrangements with other airlines on services to and from Europe, the Middle East and Africa will remain unchanged, with the exception of Virgin Australia’s partnership with Etihad Airways, which has been more limited in recent years.”
Interim authorisation will remain in place until the final determination comes into effect.
