ACCC’s first tick for Virgin-Qatar alliance for flights to Brisbane, Melbourne, Sydney and Perth
The competition watchdog has cleared the runway for a potentially lucrative five-year alliance between Qatar Airways and Virgin Australia that will help lower airfares to the Middle East.
But seeing whether the partners are able to stick a permanent landing will have to wait until next year.
The Australian Competition and Consumer Commission on Friday granted Virgin interim authority to start selling seats on 28 weekly Qatar-operated flights between Doha and Perth, Brisbane, Melbourne and Sydney.
The new services will be in addition to the international services already operated by Qatar.
The connections between Hamad International Airport and Australia’s east coast are set to start from June next year, with Perth to follow in November.
Virgin Australia would use Qatar craft and crew to operate the services.
But clearing the first hurdle comes with a court-enforceable agreement that should the watchdog not ultimately agree to the tie-up, customers who book tickets will be protected.
ACCC deputy chair Mick Keogh said the undertaking was key as no final conclusion on the application had been reached and a draft determination was not due until February.
“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,” Mr 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.”
But the chances of a final sign-off appears more likely than not, with the ACCC noting the alliance would increase capacity between Qatar and Sydney, Melbourne, Brisbane and Perth.
“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,” Mr Keogh said.
Under the proposed arrangements, Virgin’s Velocity members would continue to be able to earn and redeem points on Singapore Airlines’ operated services globally, including to and from Europe, the Middle East and Africa.
Virgin’s arrangements with South African Airways and Virgin Atlantic would not be affected.
The ACCC’s decision comes less than two months after Qatar revealed it would take a 25 per cent stake in Australia’s revived No.2 carrier — just 15 months after the Federal Government controversially rejected Qatar’s application for more flights into Australia.
Extra capacity between Australia and the Middle East is expected to help lower airfares for travellers as Virgin looks to cement its return to long-distance international flying.
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