If approved, the agreement would introduce 28 new weekly return services between Doha and Perth, Brisbane, Sydney, and Melbourne, operated by Qatar Airways’ aircraft and crew under a ‘wet lease’ arrangement. 

The ACCC believes the partnership will boost competition, enhance connectivity and provide more choice for passengers.

“We consider that the proposed cooperative conduct would likely result in several public benefits including providing enhanced products and services for air travellers which would include increased choice of international flights, with additional connectivity, convenience and loyalty program benefits for consumers,” ACCC Commissioner Anna Brakey said.

“We consider that Virgin Australia is unlikely to commence operating long-haul international services between Australia and the Middle East on a stand-alone basis in the next five years. In those circumstances, we do not consider that there is likely to be a material detrimental impact on the Australian aviation workforce as a result of the conduct.”

The ACCC granted interim approval on 29 November 2024, allowing both airlines to market and sell the new services. To safeguard travellers, the airlines agreed to refund or rebook passengers at no extra cost if final regulatory approvals are not secured.

Flight Centre Corporate Global COO Melissa Elf welcomed the announcement, saying the deal would boost competition, bring down airfares and support inbound tourism. 

“FCM Travel and Corporate Traveller have been actively calling for more international capacity and competition to our shores, so we’re pleased to see this welcomed by Australia,” Elf said.

“Those extra flights will certainly have an impact on international travel out of Australia, particularly to Europe, which has generally been slower to return to pre-pandemic capacity, and has seen higher airfares as a result.”

Elf cited recent examples on US and China routes where increased flights have driven down costs.

“We’re welcoming several new routes, airlines and carriers between Australia to the US and China over the coming weeks, and we’re seeing this drive down the cost of international fares to those destinations, and it’s boosting the volume of bookings as a result,” she said.

According to Elf, the proposed deal should also support domestic air travel. 

“Not only will the approval of this deal impact international travel, but the wet lease arrangement should also free up aircraft to better service the domestic market,” she remarked.

“A strong and competitive airline industry is good for everyone, so we’re confident this will mean cheaper fares and more travel destinations for Australians from mid-year.”

The Australian Airports Association (AAA) also welcomed the draft determination, highlighting the need for more seats to meet demand.

“We’ve just experienced likely the busiest holiday period ever seen at our airports and aircraft capacity for intercity routes is stretched thin,” AAA CEO Simon Westaway said.

“The AAA joins the ACCC in urging airlines to increase seating capacity to meet rising demand.

“The proposed Virgin-Qatar deal is a crucial opportunity to improve airline competition, capacity and jobs creation. 

“We look forward to the Federal Government’s prompt approval process for this alliance.”

Meanwhile, the Transport Workers’ Union (TWU) has also endorsed the deal, viewing it as a positive step for aviation industry stability and job creation.

“This green light of the Virgin–Qatar wet lease is a significant opportunity for the stability and success of the airline into the future,” TWU National Secretary Michael Kaine said.

However, despite the numerous potentially positive outcomes, the TWU has raised concerns about the use of Qatar-based crew – arguing it could bypass Australian workforce laws, approval of the 25% Qatar stake in VA and CEO Jayne Hrdlicka’s successor.

Under the proposed deal, Virgin Australia’s Velocity Frequent Flyer members would continue to earn and redeem points on Singapore Airlines flights worldwide, with existing partnerships with South African Airways and Virgin Atlantic remaining unchanged.

The ACCC is now calling for industry feedback on the draft determination before making its final decision, with submissions open until 7 March 2025. 

More details are available on the ACCC’s public register.