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Highlights
- Virgin Australia assures Velocity members access to Singapore Airlines flights despite Qatar deal.
- Proposed Virgin-Qatar agreement seeks ACCC approval amid competition concerns.
- Virgin plans wet-lease services to restart long-haul routes by 2025.
Virgin Australia has confirmed that its Velocity loyalty program members will retain access to Singapore Airlines flights to Europe, even if its proposed deal with Qatar Airways progresses. This assurance comes amid public consultations led by the Australian Competition and Consumer Commission (ACCC), where concerns about reduced consumer choices were raised by stakeholders like Sydney Airport and the Australian Airports Association.
Virgin stated that its longstanding codeshare agreement with Singapore Airlines remains intact, although it clarified it would not sell seats on Singapore Airlines flights beyond Asia.
The proposed partnership with Qatar Airways involves a wet lease arrangement, where Virgin will operate Qatar's planes and crews to establish new long-haul services. Virgin claims this move will stimulate local employment and reduce airfares, while its competitor Qantas (ASX:QAN) has criticized the deal, alleging potential impacts on wages for Australian cabin crew and pilots.
Virgin’s submission to the ACCC emphasized that its current fleet and infrastructure cannot support standalone long-haul international services. The carrier highlighted that acquiring suitable aircraft would take up to seven years. The proposed wet lease is presented as a practical solution to restart long-haul flights, allowing Virgin to introduce new services between major Australian cities like Sydney, Melbourne, Perth, and Brisbane, and Doha by mid-2025.
Unlike Qantas' wet-leasing arrangement with Finnair, which operates pre-existing routes, Virgin argues its arrangement would enable entirely new services that otherwise wouldn’t be possible. Qantas, meanwhile, plans to transition its Finnair wet leases to dry leases, staffed and branded by Qantas, by next year.
Tourism operators, airports, and Virgin’s pilots union have expressed support for the Virgin-Qatar partnership, citing its potential to inject $3 billion into the Australian economy over five years. Virgin’s proposal faces criticism from Qantas, which argues the arrangement lacks a clear timeline.
Virgin countered Qantas’ objections by pointing to the latter’s reliance on outsourcing and alliances, such as its decade-long partnership with Emirates. Additionally, Virgin’s plan to add business class capacity on European routes could challenge Qantas’ premium Perth-to-London service.
Pending ACCC approval, Virgin hopes to secure interim approval to begin selling international flights by Christmas, with operations targeted for June 2025. Qatar Airways is concurrently seeking Foreign Investment Review Board approval to acquire a 25% stake in Virgin Australia.
