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The ACCC has proposed to give the thumbs-up to Virgin Australia’s wet-leased flights to Doha.
The competition and consumer watchdog, which granted an interim authorisation to the deal last year that has allowed Virgin and Qatar Airways to sell tickets on the flights, believes the arrangement is “likely to result in public benefits and is unlikely to result in any public detriment”.
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According to ACCC commissioner Anna Brakey, the wet-lease deal – which would see Virgin hire Qatar 777-300ERs and their crews for 28 weekly flights to Doha – will increase competition and is unlikely to have a negative effect on Australian jobs.
“We consider that the proposed cooperative conduct would likely result in several public benefits including providing enhanced products and services for air travellers which would include increased choice of international flights, with additional connectivity, convenience and loyalty program benefits for consumers,” Brakey said.
“We consider that Virgin Australia is unlikely to commence operating long-haul international services between Australia and the Middle East on a stand-alone basis in the next five years.
“In those circumstances, we do not consider that there is likely to be a material detrimental impact on the Australian aviation workforce as a result of the conduct.”
In a statement, a Virgin spokesperson welcomed the ACCC’s announcement, which comes as the International Air Services Commission (IASC) determines whether it should grant the necessary capacity between Australia and Qatar under bilateral air services agreements. The IASC last week was advised by the Department of Transport that the current agreement would allow the deal.
“This announcement – recommending authorisation of a five-year alliance with no conditions – will deliver significant benefits to Australian travellers in the form of greater competition, value and choice when travelling to Europe, the Middle East and Africa, as well as significant benefits to the Australian economy more broadly, including tourism, job creation and better freight export options,” the spokesperson said.
“Virgin Australia’s proposed new services from Melbourne, Perth, Sydney and Brisbane to Doha are currently on sale, and today’s ACCC announcement confirms their support for these services.”
The Transport Workers’ Union, which has backed the deal, also welcomed the ACCC’s announcement but urged Virgin and owner Bain Capital to make “clear commitments” regarding worker concerns around Qatar’s labour and human rights records.
Michael Kaine, national secretary of the TWU, called the decision “a significant opportunity for the stability and success of the airline into the future”.
“There are still several uncertainties facing Virgin in the short-term, including approval of the 25% Qatar stake and CEO Hrdlicka’s successor.
“It’s now up to both Virgin and Bain to fulfil its commitment to TWU members – who have been critical in getting the airline out of administration and to the position it’s in now – to urgent and ongoing consultation throughout this process.”
Submissions on the draft determination are open until 7 March.
