Only weeks after describing rumours of Qatar Airways being on the precipice of buying a stake in her carrier as a work of fiction at CAPA in Brisbane, outgoing Virgin Australia CEO Jayne Hrdlicka was doing the media rounds this week, talking up the confirmed equity grab in the business.
VA said the QR’s 25% acquisition will enable a “measured entry” into international flying from mid-2025, precipitating the launch of long-haul flights to Doha from Brisbane, Melbourne, Perth and Sydney.
These extra flights will open up more than 100 new connecting itineraries across Europe, the Middle East and Africa.
The proposed wet lease services will also allow VA to assess the longer-term merits and viability of using wide-body aircraft.
“This partnership brings the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation,” Hrdlicka said.
“Our closer relationship allows us to dip our toe in the water regarding long-haul international flights,” she added.
While some had speculated that if QR were to purchase a stake in VA, it might kill off any plans for the airline to list on the ASX, it appears not to be the case, with Virgin stating the minority stake would serve as a “cornerstone investment” ahead of an anticipated return into public ownership.
While the added power of QR is a big win for Virgin Australia’s challenge to Qantas’ dominance with partner Emirates, the move was also significant for the Middle Eastern carrier, which has not been backwards in coming forwards about its ambitions to expand in the Australian market.
The carrier was blocked from adding a large portion of extra flights in 2023, creating a storm of headlines at the time for both the Federal Government and Qantas, with many pundits accusing the pair of colluding and keeping fair competition out of the market.
In a 2023 market laden with high airfares and limited seat capacity, it was understandable that the decision didn’t go down very well with the travelling public.
Equally, it did little to help the toxic relationship between Qantas and travel agents, with many sellers already distrustful of the carrier because of its record on refunds, cancellations and slashed commissions.
The clandestine nature of approving and blocking international carriers from entering the Australian market also sparked a Senate Inquiry, a forum which ended up having a flow-on impact on the recently released Aviation White Paper.
While the Federal Government has only tacitly committed to reviewing the decision, it has left Qatar left out of a market that many feel is desperate for more competition.
So the deal this week has shown that there are more than one way to make moves on a market than simply launching your own branded flights, and one suspects Aussie travellers will be bearing the fruit of the equity purchase very soon, if it receives regulatory approval of course.
