Travel industry leaders have backed Qatar Airways’ push for additional slots and move for a 20 per cent stake in Virgin Australia as the carrier looks to regain lost ground following the controversial blocking of additional capacity for the airline in 2023.
Reports arose on Wednesday of Qatar Airways eyeing a 20 per cent stake in private equity owned-Virgin Australia after it urged the government, in March, to revisit Transport Minister Catherine King’s rejection of extra flights for the carrier.
Flight Centre founder and managing director Graham ‘Skroo’ Turner said Qatar’s plea would bolster choices for Aussie travellers looking to save money on their Europe holidays as airfares remained above pre-COVID levels.
“On international airfares that could have an impact, it’ll certainly give people more choice,” he said.
“Qatar fly out of every major city in Australia … those extra flights will certainly have an impact on international travel out of Australia, particularly to Europe and, to a lesser extent, to the subcontinent.”
The shocking move to block the world-leading carrier from extra flights stirred controversy as the various explanations from Ms King, who was lobbied by Qantas on the decision, fell short.
After attributing the decision to concerns about Australia’s national interest, the Transport Minister said Qatar was blocked due to invasive searches of Australian women on a Qatar Airways plane in 2020 alongside helping Qantas recover from the pandemic and environmental concerns.
The blocking was estimated to cost the tourism industry up to $788m at a time when it was recovering from the crippling pandemic.
Given the controversy which arose after Ms King barred Qatar from further slots in 2023, the Flight Centre boss doubted she’d do it again when asked by SkyNews.com.au.
“I’d be very surprised, from a political point of view I’d be very surprised,” he said.
“I think they’ve probably learnt their lesson from the first knock back because it was very unpopular generally because airfares at that stage were very high and this would have immediately had a positive impact.
“The main thing is that Qatar is a quality carrier … the Australian public, I think, deserve that.
“Extra capacity makes things more competitive (and it) probably will bring international airfares down a bit.”
He added the chances of Qantas opposing Qatar’s moves were unlikely as the Aussie carrier looks to bolster its reputation after the exit of former CEO Alan Joyce last year.
“I don’t think so,” he said.
“Joyce is not there – he had a fair bit of sway with the government. I think Qantas has got a lot of their own work to do in fixing the public perception and that sort of thing.”
The bid from Qatar, which has a codeshare agreement with Virgin, will need approval from the Foreign Investment Review Board and could still be knocked back by the federal government.
The wealth of expertise from the top-rated Middle Eastern carrier will be greatly welcomed by Virgin and its owner Bain Capital, the Flight Centre boss said.
“I do think the expertise that Qatar have in running an airline that will be used by Bain and Virgin as an organisation – I think that’s a very positive thing,” he told SkyNews.com.au.
“They’re running, if not the best, one of the best airlines internationally. So, they’ve certainly got something to offer them.”
Mr Turner’s point was backed by the chief executive of the Australia Travel Industry Association (ATIA) Dean Long.
Mr Long voiced the need to bolster Virgin’s international network of just six destinations in Asia and Oceania as it battles with rival Qantas which flies to tens of destinations across every continent.
“If we get an international carrier owning a 20 per cent stake in Virgin, we should end up with, hopefully, some additional capacity into Australia and it will strengthen Virgin’s business case for bringing in more competition because they’re missing their international networks,” Mr Long told SkyNews.com.au.
Aviation expert and the editor of AirlineRatings.com Geoffrey Thomas said the investment in Virgin would put Qatar in a better position to secure the extra flights.
Additional capacity for Qatar could also amp up competition with Middle-Eastern rival Emirates which is aligned with Qantas.
“This would certainly help their case – investing in Virgin Australia – and they may get the increased services and they should get the increased services they wanted, but it also sets up a fascinating, competition with its rival Emirates,” he said.
“Emirates is in a very strong alliance with Qantas, so all of a sudden we have a very heavy-duty Middle East airline in a financial partnership with an Australian airline, similar to the Emirates-Qantas tie up.”
Domestically, Virgin operates about 30 per cent of Australia’s traffic while Qantas and Jetstar take up about 62 per cent.