VIRGIN Australian CEO Jayne Hrdlicka has left the industry with zero doubts about the airline’s future with Etihad, confirming the Middle Eastern carrier will no longer be a strategic partner if Qatar Airways is successful in buying a 25% stake.
Speaking at the Australian Corporate Travel Summit on Wednesday, the VA chief stated the carrier had no intention of taking on more than one strategic partner in the Middle East.
“We went through this very thoughtfully and for Etihad it means that they go from being an important interline and codeshare partner, an important part of our frequent flyer program, to coming out, because we can only have one partner that we’re really investing behind through the Middle East,” Hrdlicka said.
Given VA’s submission to the ACCC contained an exclusivity clause stating that Qatar Airways will become Virgin Australia’s only interline, codeshare and loyalty partner headquartered in the Middle East or Turkiye, the confirmation was expected by many in the industry.
“VA will not codeshare on the int’l flights of other airlines to, from or within the Middle East, Europe, and Africa, and will not acquire or supply any loyalty point accrual services or high-value guest services, such as lounge access provided to gold members and above, with any airline headquartered in Africa or Europe,” VA pledged in its proposal to the ACCC.
However, Singapore Airlines will remain an important partner for VA – even if the equity purchase with QR is approved – with Hrdlicka stating only codeshare flights through Europe with SQ will be impacted by the deal.
“Singapore Airlines remains a really important partner and so the Velocity benefits don’t change…and while the codesharing to Europe won’t exist anymore, codesharing into Southeast Asia, North Asia, into India, that’s alive and well and we will go from strength to strength with Singapore Airlines,” she said.
Additionally, any QR purchase would not scuttle VA partnerships with ANA or United Airlines.
Etihad will have a delegation in Australia next week to clarify its market value to Australian travellers, stay tuned to Travel Daily for updates.
While prominent Australian stakeholders in the travel sector have been broadly supportive of the Qatar-VA proposal, many have stated their reservations about any notion that VA will not be able to codeshare with other airlines.
The Council of Australian Tour Operators (CATO) said it was encouraged by the tie-up, so long as there is no reduction in the ports or number of flights Qatar Airways flies into Australia.
“CATO does not support ‘hubbing’ through Melbourne, Sydney or Brisbane at the expense of
direct flights to other cities,” the body said in it submission.
“We want to see no constraints placed on Virgin Australia’s ability to enter code-share agreements with other airlines to Europe, Africa and the Middle East. Each of these markets is of vital importance to CATO members and thus Australian travellers so any restrictions that reduce competition should be reduced.”
Meanwhile, Hrdlicka also confirmed at the Summit that she will not be at the helm of the airline when an IPO takes place, which at this stage still does not have a date.
“[A listing] is anybody’s guess, that’s up to our shareholder but the most important thing for us is to always be in a position where we’re ready,” Hrdlicka said.
“I’m super proud of how much we’ve accomplished as a team and i’m also super excited to hand over to somebody else to run through the IPO.
“We had a dry run hoping that we could get [the IPO] away about 18 months ago but the markets were shut.
“That was a pretty challenging time for me because my husband was dying and investors look you in the eye and say ‘how long are you committed to stay’?
“They want to hear three to five years and the last four years have been dog years.”
The VA boss added there is a clear plan in place so there is no risk in the handover process before an IPO takes place.
