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Virgin Australia has entered a “new era”, CEO Jayne Hrdlicka said, after the federal government approved a deal it says will benefit Australian travellers.
The federal government on Thursday gave a green light to Qatar Airways’ acquisition of a 25 per cent stake in Virgin Australia following cross-government consultation by Treasury, engaging the aviation industry, unions and other relevant stakeholders.
The proposal is expected to strengthen competition, deliver more flights and create more jobs.
Its approval was subject to legally enforceable conditions to ensure Australian representation on Virgin’s board and protection of its customer data, Treasurer Jim Chalmers said in a statement.
“Today we welcome a new era for Virgin Australia,” Hrdlicka said in a statement.
“Qatar Airways’ investment is a huge vote of confidence in our business and Australian aviation more broadly. It sets us up for long-term success and adds fuel to our bold transformation agenda.”
How will the Qatar-Virgin deal work?
The proposal is expected to provide a long-term pathway for Virgin Australia to operate its own long-haul flights, which the airline axed as part of .
It is also expected to drive down airfares and benefit regional Australia through improved inbound tourism connections, sales and marketing visibility to these destinations, all while including necessary jobs safeguards, according to Australian Airports Association chief executive Simon Westaway.
“This deal is a major win for the aviation industry and the Australian flying public,” he said.
Under a so-called wet lease agreement, Virgin Australia will be able to lease both Qatar Airways’ aircraft and crew. Qantas has a similar agreement with Finnair, Finland’s flag carrier, for two aircraft plus crew.
The approval will mean 28 new weekly return services between Qatar’s capital Doha and Perth, Brisbane, Sydney and Melbourne.
Flights between Sydney, Brisbane and Perth to Doha are expected to begin in June, with those between Melbourne and Doha slated to commence in December.
The agreement will also include a secondment program, which will place 20 pilots and 40 cabin crew in Doha, to gain long-haul flying experience in 2025, Chalmers said, and there would be at least 60 Australia-based backfill positions.
The federal government’s decision follows the Australian Competition and Consumer Commission’s draft determination of the wet lease agreement in mid-February. This was welcomed by the Transport Workers’ Union, but it did have concerns over labour standards “given Qatar’s track record with “.
Chalmers said the airlines had committed to consulting with the union over the potential for dry lease operations — under which Virgin Australia would release the aircraft but provide its own crew — that would begin no later than three years into the partnership.
The union had been assured that any future dry-lease agreement would use Australian-based labour, Chalmers said.
“The proposal is also expected to deliver broader economic benefits including more job creation in Australia, support for the tourism industry and enhancing Australia’s position as a key travel hub.”
— With reporting by the Australian Associated Press
