Australia’s ACCC has granted interim authorisation to Virgin Australia and Qatar Airways allowing them to engage in cooperative conduct under an integrated alliance. The ACCC has also accepted a court enforceable undertaking from Virgin Australia and Qatar Airways in relation to the conduct.
Under the interim authorisation, Virgin Australia and Qatar Airways can commence marketing and selling 28 weekly scheduled return flights between Doha and Brisbane, Melbourne, Perth and Sydney. The new services will be in addition to the international services already operated by Qatar Airways.
The airlines sought urgent interim authorisation to enable Virgin Australia to start flying its new Australia-Doha services from Sydney, Melbourne and Brisbane in June 2025, with Perth services to follow in November 2025.
”We consider that granting interim authorisation now will allow Qatar Airways and Virgin Australia the lead time to undertake the necessary planning discussions, marketing, selling and system alignment in preparation for Virgin Australia to commence flying the new services by June 2025,” ACCC Deputy Chair Keogh said
The new services will be offered subject to final regulatory approval by the ACCC and other government bodies. The undertaking accepted by the ACCC ensures that if final regulatory approval is ultimately not granted, then customers who have booked these proposed new services would be protected.
“Affected customers will be given the option of a refund or re-accommodation on a suitable alternative flight at no additional charge and would not be out of pocket for any reasonably foreseeable costs if these proposed new services ultimately don’t get approved,” Keogh said. “Having this court-enforceable undertaking that protects customers was important to our decision to allow Virgin Australia and Qatar Airways to start selling tickets now.”
The ACCC has not reached any final conclusion on the application for authorisation. The parties argue the arrangements will result in public benefits in the form of enhanced products and services. This includes increased capacity between Qatar and each of Sydney, Melbourne, Brisbane and Perth. The ACCC is required to assess the benefits, and weigh them against any possible public detriments in reaching a final decision.
Under the proposed arrangements, Virgin Australia would use Qatar Airways craft and crew to operate the new services. This is known in the aviation industry as ‘wetlease’ arrangements.
“We are carefully considering the concerns that interested parties have raised, particularly around the wetlease arrangements and the impact of the proposed exclusivity arrangements between Virgin Australia and Qatar Airways,” Keogh said.
Under the proposed arrangements Velocity members will continue to be able to earn and redeem Velocity points on Singapore Airlines’ operated services globally, including to and from Europe, the Middle East and Africa. Virgin Australia’s arrangements with South African Airways and Virgin Atlantic would be unchanged. Qatar Airways and Virgin Australia have sought authorisation for five years. The ACCC is expected to release a draft determination in February 2025.
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