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Virgin Australia’s wet-leased flights to Doha will go ahead following the International Air Services Commission’s decision to award it 28 flights per week to and from Qatar.
The decision clears the final major hurdle for Virgin and Qatar following the approval of Qatar’s 25 per cent stake in Virgin by the Foreign Investment Review Board (FIRB) and a draft determination by the ACCC that it would not oppose the potential arrangement.
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Virgin Australia will wet lease Qatar Airways 777-300ERs to operate flights from Sydney, Perth and Brisbane to Doha starting in June, and from Melbourne starting in December.
“The Commission considers that the benefit to the public of Virgin Australia offering services on the route outweighs any detriment to the public of the proposed code share services between Virgin Australia and Qatar Airways on the route,” the IASC wrote in its decision.
“The arrangement between the two carriers is likely to foster an environment in which Australian carriers can effectively compete with each other and with foreign carriers, specifically on the Australia-Middle East market and beyond.
“The arrangement is likely to strengthen Virgin Australia’s market position through a combined network offering with Qatar Airways, enabling the Australian carrier to compete with other carriers.”
The IASC also said that any potential detriment would be alleviated by stimulating competition between Australia and the Middle East.
“The airlines offering services on these routes would be incentivised to compete on price and/or services to retain and attract customers,” it wrote.
“The entry of another carrier on Australia-Middle East routes would likely elicit a competitive response from other airlines operating on these routes and would likely lead to improved services and airfare competition, providing greater benefit to the public.”
The commission was last month informed by the government that the proposed flights would be permitted according to the terms of bilateral air services agreements with Qatar.
Jim Wolfe, assistant secretary of the Department of Transport’s International Aviation Branch, said Virgin “is currently designated as an Australian international airline under the Australia-Qatar Air Services Agreement and holds an International Airline Licence, which allows for operations between Australia and Qatar”.
“Based on the information provided, Virgin Australia’s proposed operations are allowed under the Australia-Qatar bilateral air services arrangements,” Wolfe said.
Virgin will also need to obtain timetable approval from the Department of Transport under the Air Navigation Regulation 2016.
“The Department will only approve an Australian airline’s timetable application if they hold an allocation of capacity from the IASC and they meet Australia’s aviation safety and security requirements,” Wolfe said last month.
In a statement, Virgin Australia said it welcomed the decision, which is in effect for a period of five years from March 2025.
“These services will make Virgin Australia the only Australian carrier to fly directly to any country in the Middle East and mark our return to long-haul international flying,” a spokesperson said.
“As well as enhancing competition and placing downward pressure on airfares to Europe, the Middle East and Africa, the flights are expected to generate an additional $3 billion to the Australian tourism and visitor economy over the next five years, as well as create significant new jobs, at Virgin Australia, Australian airports, and ultimately across the tourism sector.”
