Virgin Australia and Qatar Airways 1 Step Closer to Flight Alliance Approval

A Virgin Australia plane takes off from Sydney Airport in Australia, on Jan. 20, 2024. Jenny Evans/Getty Images

Virgin Australia and Qatar Airways have had a win on their proposal to commence 28 flights between Doha and four Australian cities.

The Australian Competition and Consumer Commission (ACCC) is proposing to grant approval for the two airlines to form a five year alliance to operate the flights.

Virgin and Qatar are seeking the green light to form a partnership that would introduce new weekly return flights between Doha and four Australian cities—Perth, Brisbane, Sydney, and Melbourne.

As part of the plan, Virgin Australia would operate these flights using Qatar Airways’ aircraft and crew, a practice known in the aviation industry as a “wet lease.” On the other hand, a dry lease is where the aircraft alone is provided.

“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,” ACCC commissioner Anna Brakey said.

Subject to Regulatory Approval

However, the final decision is still subject to regulatory approval by the ACCC and other government agencies.

Before making a final decision, the ACCC is asking for feedback on their draft determination.

Both airlines have promised to provide full refunds or suitable alternative flights at no extra charge to any customers who book the new flights, should final regulatory approvals not be granted.

The ACCC also noted that they had received some feedback that the arrangement could circumvent Australian workforce laws and regulations.

Further, they’ve received concerns that the use of Qatar based crew could have “negative implications for the Australian aviation workforce.”

However, Brakey added, “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.”

“In those circumstances, we do not consider that there is likely to be a material detrimental impact on the Australian aviation workforce as a result of the conduct.”

In November 2024, the Australian Federation of Air Pilots (AFAP) said they supported the wet lease arrangement, subject to conditions.

These include Virgin committing to transition to a dry lease arrangement by the completion of the five-year period or ceasing the wet lease flying at the end of the three-year period.

“However, we cannot support the use of a wet lease arrangement to access unused Australian air rights that is open ended. We also see the purpose of the wet lease is to start up a new international operation and then to transition to a dry lease after a defined period,” the AFAP said. 

Qatar Plan to Buy Virgin Stake Awaiting Approval

In late September, Qatar announced it has a plan to acquire a 25 percent stake in Virgin Australia. This plan is still subject approval from the Foreign Investment Review board.

At the time, Virgin Australia Group CEO Jayne Hrdlicka said the partnership brought the missing piece to Virgin Australia’s longer-term strategy and is a huge vote of confidence in Australian aviation.

“Importantly, it will further strengthen Virgin Australia’s ability to compete over the long term, which will inevitably translate into more choice and even better value airfares for consumers as well as additional Australian aviation jobs,” she said.

“Qatar Airways has been a valued codeshare partner of Virgin Australia since 2022. This investment by the world’s best airline will deepen an already strong partnership by bringing critical scale and the best industry expertise to support our long-term competitiveness and growth.”

Meanwhile, Qatar Airways Group CEO Badr Mohammed Al-Meersaid that they believed the agreement would help support Australian jobs, businesses, and the wider economy.

Further, he noted competition in aviation was a good thing that ultimately benefits customers.

“The investment further demonstrates our strategic alignment with Virgin Australia and our collective ambition to deliver the best possible service and value to Australian passengers,” he said.

Virgin’s largest rival Qantas also has a partnership with Emirates, which is based in Dubai.