Blocking Qatar flights helps Qantas and hurts us, says Virgin

As reported in The Sydney Morning Herald, Virgin’s codeshare agreement with Qatar gives it a 25 per cent market share of routes from Australia to Europe and the Middle East, which would have grown to 27 per cent if Qatar’s air rights had been expanded.

“We would describe this decision as deeply regrettable and a source of deep disappointment. The unintended consequence is that it negatively impacts the competitive position of Virgin Australia domestically and internationally in favour of our larger rival,” said Bennett.

“We chose Qatar as a historically strong support to Australian aviation, and they’re a world-class product. We would hope we can find a way to solve this impasse through a constructive solution-orientated discussion with the government as we are collateral damage.”

Qantas has opposed expanding Qatar’s air rights, despite the two airlines being partners in the Oneworld alliance. Qantas International CEO Cam Wallace said the ongoing argument “completely distorts the broader dynamics in the market at the moment, and how competitive it is”, adding that airlines like China Southern and Singapore have announced more flights in recent weeks than Qatar had been seeking.

“There’s plenty of headroom for airlines to add more flights. Australia has uncapped traffic rights with Singapore, the US, the UK, India, China, Japan and New Zealand, which coincidentally covers most of the nation’s biggest trading partners and top destinations. Much of the additional flying is coming from those markets,” he said.

“International fares have fallen materially since the start of the calendar year and that trend is likely to continue. This is a highly competitive market that Qantas has an 18 per cent share of, so the idea that we are setting prices for the market as a whole is just false.”

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Qatar has recently been accused of running almost-empty “ghost flights” to minor Australian airports such as Adelaide largely to skirt restrictions on flying into the four major gateways of Sydney, Melbourne, Brisbane and Perth.

Speaking in Question Time earlier this month, Minister King said there was not one single factor that had led to the government’s decision not to expand Qatar’s air rights. The Minister’s office has previously said doing so would not have been in Australia’s “national interest”.

“We only sign up to agreements that benefit our national interest in all of its broad complexity, and that includes ensuring that we have an aviation sector through the recovery that employs Australian workers,” she said.

“We will always consider the need to ensure that there are long-term, well-paid … secure jobs by Australians in the aviation sector when we are making this decision.”