DOHA- Flag carrier Qatar Airways (QR) is poised to significantly increase its Australian operations through a proposed 25% stake acquisition in Virgin Australia (VA).
This strategic move could potentially allow Qatar Airways to operate up to 28 additional weekly flights from Australia to Doha (DOH), bypassing previous governmental restrictions, Australian Aviation reported.
Qatar Airways Australia Flights
The deal emerges as a clever workaround to the Australian government’s earlier decision to block Qatar Airways’ expansion. In 2023, Transport Minister Catherine King rejected the airline’s request for 21 extra weekly flights into major Australian airports.
Under the proposed arrangement, Qatar Airways would wet-lease aircraft and crew to Virgin Australia. This setup effectively classifies the flights as domestic operations, thus sidestepping the need for direct government approval.
Australia’s bilateral air service agreements with Qatar currently permit Qatari carriers 28 weekly flights to Sydney (SYD), Melbourne (MEL), Brisbane (BNE), and Perth (PER). The same allotment applies reciprocally to Australian carriers flying to Doha. The agreement also allows for seven additional weekly flights to these major airports, provided they operate via or beyond another Australian point.
No Australian airline currently flies to Doha, leaving this capacity untapped. Any move to utilize this allowance would require approval from the International Air Services Commission (IASC). The use of Qatari crews under a wet-lease agreement may also raise labor-related considerations.
The proposed deal still requires approval from the Foreign Investment Review Board.
Widebody Operations
Virgin Australia CEO Jayne Hrdlicka announced a strategic wet-leasing agreement with Qatar Airways, signaling the airline’s cautious return to international wide-body flights.
Hrdlicka praised her team’s efforts in revitalizing Virgin Australia, attributing the airline’s renewed competitiveness to their hard work. The CEO emphasized that this turnaround has attracted Qatar Airways, widely regarded as one of the world’s premier airlines, as a potential investor.
Mike Murphy, partner at Virgin’s parent company Bain Capital, expressed satisfaction with Qatar Airways’ interest in Virgin. Murphy highlighted the airline’s remarkable transformation over the past four years, noting its evolution from a decade of losses and administration to a profitable entity with a strong market position, loyal customer base, and promising growth trajectory.
The proposed partnership marks a significant shift in Virgin Australia’s strategy. Following its 2020 administration, the airline retreated from the international wide-body market, concentrating instead on domestic and short-haul international routes primarily using Boeing 737 aircraft.
Qatar CEO Remarks
Qatar Airways Group CEO Badr Mohammed Al-Meer unveiled the company’s proposed strategic investment in Virgin Australia.
Al-Meer emphasized the significant alignment between the two airlines and their deep-rooted relationships. He expressed pride in the partnership’s potential to enhance value and choices for Australian consumers.
The CEO highlighted the investment’s strategic importance, underscoring Qatar Airways’ commitment to improving service quality and value for Australian passengers. Al-Meer stressed the benefits of increased competition in the aviation sector, stating it raises industry standards and ultimately advantages customers.
Al-Meer also addressed the broader economic implications of the agreement. He projected positive impacts on Australian jobs, businesses, and the overall economy, positioning the investment as beneficial beyond the immediate aviation sector.
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