Opening Up Routes for Qatar Airways Will Lower Airfares: Virgin CEO

Opening Up Routes for Qatar Airways Will Lower Airfares: Virgin CEO
A Virgin Australia plane takes off at Sydney Airport in Sydney, Australia on March 19, 2020. (Saeed Khan via Getty Images)

Virgin Australia’s chief executive has criticised rival company Qantas for lobbying to block Qatar Airways from operating more flights in Australia.

“Understanding what’s driving inflation and how we unlock some of the constraints and certainly more seats into Australia is a big part of it and allowing Qatar to add one service per day into Sydney, Melbourne, and Brisbane in addition to Perth would make a huge difference,” Virgin Australia CEO Jayne Hrdlicka told ABC’s Radio National on Aug. 29.

The discussions on the rejection of more flights from Qatar’s flag carrier come as a Senate inquiry grilled Qantas CEO Alan Joyce after his company reported an attributable statutory profit after tax of $1.75 billion (US$1.12 billion) in the 12 months to June 30, 2023, swinging from a loss of $860 million in the previous year.

Its revenue moved to $19.82 billion from $9.11 billion.

Mr. Joyce said that additional capacity for Qatar Airways would distort the market, a statement Ms. Hrdlicka did not agree with, noting that there is high demand for more flights in the major cities of Australia.

“That’s where the seats need to come and that’s what Qatar has applied for. It’s also a bit of a nonsense to say it’s a market distortion when there’s such little capacity that’s recovered and Qantas and Emirates together as partners have roughly 45 percent share to Europe over the Middle East,” Ms. Hrdlicka said.

She added that Qatar Airways currently has about 23 percent share and “there is no market distortion that can be argued as a reason not to add” more flights for the Middle Eastern airline.

Assistant Treasurer Stephen Jones said that efforts to lower airfares would disadvantage Qantas, Australia’s largest airline.

“We can drive prices down but if we drive them down to a level where it’s actually unsustainable to run an airline, instead of having two carriers we will design our markets in a way which will make it unsustainable for the existing Australian-based carrier,” Mr. Jones told the Australian Financial Review.

Ms. Hrdlicka expressed disappointment with the assistant treasurer’s statement and said that she does not think the government has full information when it comes to the matter.

“It’s a disappointing statement and I’m sure that every CEO in the country was disappointed to hear that there’s one company in the country that should be protected and profits should be protected. They [Qantas] are privately owned, and listed in the public market. They’re not government-owned and they shut down during COVID ... I don’t think the government had full facts and I’m surprised to hear that the basis for the decision would be to protect Qantas’ profits.”

Last month, Transport Minister Catherine King declined to approve the request of Qatar Airways to add 28 flights per week, citing the protection of national interest.

“This was a decision that was taken in the national interest, and there’s no one factor that swayed my consideration one way or the other,” Ms. King said.

“From time to time, governments come to us and request increase of capacity into the Australian market. And we weigh up the factors that are in our national interest to make sure that we continue to have a strong aviation market and a strong aviation industry in this country.”

Celene Ignacio is a reporter based in Sydney, Australia. She previously worked as a reporter for S&P Global, BusinessWorld Philippines, and The Manila Times.
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