Qantas v Qatar Airways: Regulator clears Qatar-Virgin Australia alliance

Australia’s competition regulator has given the go-ahead for Qatar Airways to launch an alliance with Virgin Australia.

The decision clears Qatar Airways to cooperate for five years in an “integrated alliance” with the Australian carrier, in which it will take a 25% stake.

The pact would double flights between Doha and major Australian airports, the Australian Competition and Consumer Commission said.

The boost in Australia-Middle East flights would create “minimal, if any, public detriment”, authority commissioner Anna Brakey said.

“This will likely place downward price pressure on these routes and will also give customers of Virgin Australia and Qatar Airways a greater choice of international flights with additional connectivity and loyalty programme benefits.”

Under the pact, Qatar Airways and Virgin Australia plan to launch 28 new weekly services between Doha and Sydney, Melbourne, Brisbane and Perth.

The competition regulator’s decision was widely expected after it issued a draft determination in February proposing to grant authorisation.

The two airlines, along with Virgin owner Bain Capital, announced the long-rumoured alliance proposal in October last year.

The new flights are expected to stoke competition on expensive long-haul routes long dominated by Qantas.

Qantas dominance

Qantas, along with its low-cost brand Jetstar, has a more than 60% share of the Australian market and boasts strong political clout.

Virgin Australia started bankruptcy proceedings in 2020, laying off hundreds of staff as the Covid-19 outbreak grounded international flights.

US private equity giant Bain Capital came to the airline’s rescue after the Australian Government refused to bail out the majority foreign-owned company.

Qatar Airways has been looking to increase its foothold in the Australian market.

In 2023, Qatar launched a bid to put on 21 extra international flights to and from Australia each week.

But the Australian Government snubbed the request, citing a 2020 strip search scandal at Doha Airport as a “factor”.

Women were pulled off 10 Qatar Airways flights at Doha Airport and forced to take invasive gynaecological exams after a baby was abandoned in an airport bathroom.

Three Australian women lodged legal action against Qatar Airways following the ordeal, although the case was eventually dismissed.

© Agence France-Presse