The Australian Competition and Consumer Commission (ACCC) has approved Virgin Australia's integrated alliance with Qatar Airways on March 28, 2025.
The alliance is set to double flight frequency between major Australian airports and Doha under the five year alliance. Qatar said the increased flights are expected to provide a significant boost to the Australian visitor and tourism economy, generating an estimated AUD$3bn ($1.9bn) in economic value over the next five years.
The approval follows the Australian Government's approval of Qatar Airways Group's 25% investment in the airline at the end of February this year, alongside majority shareholder Bain Capital.
Under the integrated alliance, the two airlines will commence 28 new weekly return services between Doha and the major airports in Sydney, Melbourne, Brisbane, and Perth. Virgin Australia will use Qatar Airways' aircraft and crew to operate the new services under a wet lease arrangement.
The ACCC noted that some concerns were raised surrounding the wet lease arrangement may undercut Australian aviation jobs, but said it considered it “unlikely” that Virgin Australia or any other Australian airline would commence operating routes to Doha on stand-alone basis in the next five years.
“We consider it unlikely that the conduct will result in a material detrimental impact on the Australian aviation workforce,” said ACCC Commissioner Anna Brakey.
The new services will be in addition to the international services already operated by Qatar Airways.
“This is a defining moment for Virgin Australia and the Australian aviation landscape,” said Virgin Australia CEO Dave Emerson. “The ACCC's final approval of our deeper strategic partnership with Qatar Airways marks the start of a new chapter for our airline and a world of opportunities for our people and customers.
Brakey commented: “We consider that the conduct is likely to result in public benefits such as adding additional capacity on flights between Australia and the Middle East and is likely to result in minimal, if any, public detriment.”
Emerson added: “Already, we are seeing some of the positive benefits of the partnership, including increased sale activity on airfares between Australia and Europe, the Middle East and Africa thanks to increased competition.”
Brakey said the alliance will “likely place downward pressure” on these particular routes, while also giving customers of both airlines “greater choice” of international flights, along with additional connectivity and loyalty programme benefits.
“Today’s announcement by the ACCC sends a clear signal of the appetite that exists for delivering competition, world-class service and value to Australian passengers,” said Qatar Airways Group CEO Mohammed Al-Meer. “It also marks the start of a new chapter in the relationship between our two airlines."
The ACCC noted that concerns had also been raised on whether the alliance could reduce Virgin Australia's ability to enter into partnerships with other airlines. Brakey said: “We concluded that the overall impact of the exclusivity arrangements on consumers is likely to be minimal. This is because Velocity Frequent Flyer members will continue to be able to earn and redeem Velocity points on Singapore Airlines services operated globally, including on services to and from Europe, the Middle East and Africa.”
She added that Virgin Australia's arrangements with others airlines on services to and from Europe, the Middle East, and Africa remain unchanged, except for its partnership with Etihad Airways, which has been “more limited in recent years”.
Both airlines had signed a memorandum of understanding (MoU) to collaborate on a range of sustainability initiatives, including aims to advance the use of sustainable aviation fuel (SAF).