The Australian Competition and Consumer Commission has today granted interim authorisation to an alliance between Virgin Australia and Qatar Airways.
Both carriers can now commence selling 28 weekly return flights between Doha and Brisbane, Melbourne, Perth and Sydney.
The new partnership challenges Qantas’ codeshare partnership with Emirates, which has remained a dominant market player since it first launched more than 10 years ago.
In making its decision, the ACCC said granting interim authorisation will allow the two carriers the lead-time to undertake necessary planning discussions, marketing, selling and system alignment in preparation for new services to start operating in June 2025.
While preliminary approval is a positive step for the alliance, the ACCC noted the new services will be subject to final regulatory approval by the ACCC and other government bodies, and the undertaking accepted today ensures that if final regulatory approval is ultimately denied, then customers who have booked the proposed new services will be protected.
“Affected customers will be given the option of a refund or re-accommodation on a suitable alternative flight at no additional charge and would not be out of pocket for any reasonably foreseeable costs if these proposed new services ultimately don’t get approved,” ACCC Deputy Chair Keogh said.
Before giving final approval, the ACCC said it is carefully considering concerns raised around wet lease arrangements, and the impact of the proposed exclusivity arrangements between Virgin Australia and Qatar Airways.
The ACCC is expected to release a draft determination in February 2025.
There was no explicit mention made of granting approval for Qatar Airways’ proposed 25% purchase in VA.
Meanwhile, Flight Centre Corporate Global COO Melissa Elf shared her thoughts on the new alliance, welcoming stronger competition and capacity.
“The interim approval of the deal will support the recovery of our international visitor economy, and strongly contribute to corporate travel recovery,” Elf said.
“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.”
She also drew comparisons between the new alliance and flights into the US and China.
“We’re welcoming several new routes, airlines and carriers between Australia to the U.S. and China over the coming weeks, and we’re seeing this drive down the cost of international fares to those destinations, and it’s boosting the volume of bookings as a result,” Elf observed.
“Not only will the approval of this deal impact international travel, but the wet lease arrangement should also free up aircraft to better service the domestic market.”
