Virgin Australia and Qatar Airways Alliance Gains ACCC’s Preliminary Approval

The Australian Competition and Consumer Commission (ACCC) has announced its intention to approve a cooperative alliance between Virgin Australia and Qatar Airways for a five-year period. Although final regulatory approvals are still pending, the competition watchdog’s proposal to authorise this strategic partnership is a promising development for air travellers.

Enhanced Connectivity and Competition

The proposed alliance will see Virgin Australia and Qatar Airways collaborate on 28 new weekly return services between Doha and four Australian cities: Perth, Brisbane, Sydney, and Melbourne. According to the ACCC, this partnership is expected to boost competition, enhance connectivity, and provide passengers with more choices. Under the agreement, Virgin Australia would operate the new services using Qatar Airways’ aircraft and crew under a ‘wet lease’ arrangement.

Public Benefits

ACCC Commissioner Anna Brakey highlighted the potential benefits of the cooperative conduct: “We consider that the proposed cooperative conduct would likely result in several public benefits including providing enhanced products and services for air travellers, which would include increased choice of international flights, with additional connectivity, convenience, and loyalty program benefits for consumers.”

Interim Authorization and Marketing

The airlines have already begun marketing and selling the new Australia-Doha routes under an interim authorization granted by the ACCC in November last year. Should the final regulatory approvals not be granted, both airlines have agreed to offer refunds or re-accommodation at no extra charge.

Workforce Concerns

While some stakeholders have raised concerns about the impact on Australian workforce laws, particularly the use of Qatar-based crew, the ACCC believes the proposed alliance would not significantly harm the Australian aviation workforce. Commissioner Brakey noted, “We consider that Virgin Australia is unlikely to commence operating long-haul international services between Australia and the Middle East on a stand-alone basis in the next five years.”

Loyalty Program Benefits

Under the proposed deal, Virgin Australia’s Velocity Frequent Flyer members would continue to earn and redeem points on Singapore Airlines flights worldwide, with existing partnerships with South African Airways and Virgin Atlantic remaining unchanged.

Public Feedback and Final Decision

The ACCC is now seeking public feedback on its draft determination, with submissions due by 7 March 2025, before making its final decision.

This potential alliance between Virgin Australia and Qatar Airways marks an exciting chapter in international air travel, promising enhanced services, greater connectivity, and improved options for passengers travelling between Australia and the Middle East.