Qatar Airways will soon own 25 per cent of Virgin Australia. Photo: Virgin Australia.
The Federal Government has approved a deal to allow Qatar Airways to buy a 25 per cent stake in Virgin Australia.
Treasurer Jim Chalmers announced on Thursday morning (27 February) he had taken advice from the Foreign Investment Review Board and given the deal the go-ahead.
He said competition in Australia’s aviation sector would be strengthened under the new arrangement.
“It will increase Virgin Australia’s capacity on key international routes and provides a long-term pathway for the airline to operate its own long-haul flights,” Dr 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.”
The deal, which needed the sanction under foreign investment rules, will allow Virgin to lease planes from the Qatari carrier to compete on routes between Australia and Doha from June this year.
The new arrangement is still subject to International Air Services Commission approval of the allocation of air space rights for flights between Australia and Qatar.
Tickets for some flights (to and from Perth) have been on sale for months, while others, including Sydney and Melbourne, will come online at the end of the year.
Travellers on Virgin Australia flights arriving in Doha will have the option to be connected to Qatar Airways’ significant number of international routes for destinations around the world.
The agreement includes a secondment program, which will place 20 pilots and 40 cabin crew in Doha this year for long-haul flying experience.
Dr Chalmers said there would be at least 60 Australian-based backfill positions.
He said both airlines had committed to consulting with unions over future dry-lease operations, where Virgin Australia would release an aircraft but provide its own crew.
Assurances have been given that any future dry-lease arrangements would use Australian-based labour.
Such arrangements could be in place within three years.
Virgin Australia has played down concerns raised by some of its pilots and crews over what has been described as Qatar’s more relaxed labour laws and less stringent human rights conditions.
In a statement issued on Thursday, Virgin said its staff were on board with the deal.
“Following consultation with unions and relevant cabin crew and pilot communities, there has been an overwhelming response to the expressions of interest for secondment opportunities for Virgin Australia pilot and cabin crew with Qatar Airways,” the statement said.
“This will also provide promotional opportunities for other team members and new hires through the backfilling of seconded staff.”
Virgin said the deal would help bring down flight costs for Australians travelling to and from the Middle East.
A recent upswing of more international airlines, most notably from China and Turkey, has added flights between cities in their countries and those in Australia.
Original Article published by Chris Johnson on Riotact.
