The travel industry has welcomed the Federal Treasurer’s approval of Qatar’s minority 25 per cent stake in Virgin Australia as the airline prepare to wet lease the Middle Eastern carrier plane for long-haul flights from 1 June.
The Australian Travel Industry Association (ATIA) welcomed the approval saying the move that will enhance airline competition and create new opportunities for Australian travel agents and advisors.
“This is great news for Australians who want more choice and more competitive fares when travelling internationally, with greater choices on flights to Europe,” ATIA CEO DEan Long said. “More competition in the skies drives innovation, better pricing and improved services for travellers.
“It also increases the potential for greater investment to drive domestic competition. It’s a decision which will bring long-term benefits to Australian travellers and the broader travel industry. This decision strengthens the role of travel agents and advisors in delivering value to consumers. For agencies, greater competition means more reasons for travellers to use agencies and their travel advisors to find the best value.
“For our land supply members, greater competition and more competitive fares free up more of the budget for travellers to spend more on experiencing destinations through touring.”
“With greater competition comes greater negotiation power for travel agents and advisors to drive greater commercial outcomes.”
Flight Centre Travel Group boss Graham ‘Scroo’ Turner said the deal would have a significant impact on thousands of Australian travelling overseas.
“This is about 28 extra flights a week out of Sydney, Brisbane, Melbourne and Perth, I think, so it’s a significant number, so I think it’s mainly 777 that they are using so the capacity is quite high,” he said on Today.
“It will certainly make a difference in terms of competitiveness and capacity because as we know airfares have been reasonably high.”
Turner said the deal opened the door for more improved options for Australians wanting to travel overseas.
“You will see airlines like Turkish, which is one of the biggest international airlines in the world, they are expanding their flights into Australia and before long you will be able to fly direct to Istanbul to Sydney for example.
“The Chinese carriers are coming back in a much bigger way. One of the differences there is you can fly to Chine, so Beijing, then direct to Europe over Russia, most of the other airlines cant do that, if that takes your fancy.”
Australian Airports Association CEO Simon Westaway also supported the decision.
“This deal is a major win for the aviation industry and the Australian flying public as it improves competition and connectivity,” Westaway said. “We’re pleased to see this move that will drive down airfares and create jobs growth.
“There are also added benefits for regional Australia, as the alliance will provide improved inbound tourism connections and sales and marketing visibility to regional tourism destinations.”
The alliance will introduce further capacity and greater choice for Australian travellers and international inbound tourists, along with valuable air freight opportunities,” AAA’s Westaway added.
“The Treasurer’s approval includes necessary safeguards, including a three-year deadline to implement dry lease arrangements in Australia.
“The AAA continues to advocate for more competition in the Australian airline market and we believe this alliance is a positive way to do that.”
Flight Centre Corporate’s FCM Travel and Corporate Traveller COO Melissa Elf said the move would bring about stronger competition and capacity, in turn bolstering choice and affordability in travel for Aussie corporates and holidaymakers.
“FCM Travel and Corporate Traveller have been actively calling for more international capacity and competition to our shores, so we’re pleased to see this welcomed by Australia,” Elf said.
“The approval of the deal will support the recovery of our international visitor economy, and strongly contribute to corporate travel recovery.
‘“It will not only make travel to the Middle East and Europe more affordable for our corporate travellers, but it will importantly see inbound benefits to Australian trade and tourism. Those extra flights will certainly have an impact on international travel out of Australia, particularly to Europe, which has generally been slower to return to pre-pandemic capacity, and has seen higher airfares as a result.”
The approval took some of the gloss of Qantas CEO Vanessa Hudson’s half yearly profit results announced at Tullamarine airport this morning. The media briefing also reported on the national carrier’s Boeing 737 cabin upgrades, and the first of its A321XLR which are scheduled to arrive later this year. But the CEO said she welcomed the competition.
“We always said that we welcome competition, and we also said that we weren’t going to oppose the results,” she said. “So from the outset, that’s been our position. And I think the announcement today was expected, our focus is about looking after our customers. It’s about continuing with the investment that we that we are doing, and we feel really confident in being able to compete, not just against Qatar and Virgin, but we compete against 52 international carriers globally.”
Qatar/Virgin Australia approval process
Qatar Airways Group’s investment in Virgin Australia received Foreign Investment Review Board (FIRB) approval following the Federal Treasurer’s announcement this morning.
The approval follows the Australian Competition and Consumer Commission’s (ACCC) Draft Determination on 18 February indicating its intention to authorise the airlines’ integrated alliance. Final approval is expected in March/April 2025.
Virgin Australia now awaits a decision from the International Air Services Commission (IASC) on what is an uncontested allocation of air rights for services between Australia and Qatar, due to commence in June.
