Virgin Australia blindsided by government block on Qatar flights

Virgin Australia says it was blindsided by a government rejection in July of additional flights into Australia by partner airline Qatar Airways as pressure mounts on authorities to explain the decision. 

Speaking at a parliamentary inquiry in Canberra on Wednesday, Virgin’s Chief Executive Officer Jayne Hrdlicka said a meeting with Transport Minister Catherine King in January made her believe that Qatar Airways’ request to operate more flights would be granted. “I was left with a very clear impression that a decision to proceed was imminent,” Hrdlicka told senators on the panel.

But Hrdlicka said her doubts grew after a May 1 conversation with King, who raised concerns about a 2020 incident at Doha airport in which Australian women were subject to invasive, naked inspections after a baby was abandoned in the terminal. “I was now concerned that the air rights might not be granted,” Hrdlicka said. She had a phone call with Prime Minister Anthony Albanese on July 13, when he also expressed concern about the same matter.

Hrdlicka’s disclosures shed the most light yet on a government decision that has baffled academics and CEOs from aviation to banking. Qatar had asked to operate 28 more flights into major Australian airports, effectively doubling its capacity into the country. Demand for international flights is outstripping supply and fares have soared. The extra services would have delivered annual economic benefits of about A$1 billion ($638 million), according to the University of Sydney. 

According to Hrdlicka, approving the Qatar Airways request was a no-brainer.

“Our assumption was that this was an easy decision to make,” she said. “If anything, I regret that we did not lobby on this issue more actively and aggressively. The case of granting rights seemed so compelling that we didn’t believe it either necessary or appropriate.”

The parliamentary inquiry is exploring Qantas’ potential influence on the decision after the airline, which controls 60% of the domestic market, lobbied the government over Qatar Airways’ application. Bain Capital-owned Virgin Australia argues the extra Qatar Airways passengers would have fed its own domestic network in Australia.

‘Unthinkable’

Hrdlicka said Virgin thought the economic benefits of the extra flights would “win the day” and concerns about humans rights would be dealt with separately. She had a further conversation with Minister King on Sept. 1 to discuss the rejection. Hrdlicka said she was told it was about “the national interest.”

Executives from Qatar Airways earlier told the inquiry they were confused about the decision and didn’t receive an explanation.

Matt Raos, senior vice president of global sales at Qatar Airways, said the rejection didn’t help Australian exporters who need freight capacity, or travelers heading in and out of Australia who are paying too much for fares. “Some key interests may have been missed,” he said.

Raos described the incident at Doha airport in 2020 as “a one-off.”

“We are completely committed to ensuring nothing like this happens again,” he said.