“I was concerned that the air rights might not be granted,” Virgin’s chief executive officer Jayne Hrdlicka said. She had a phone call with Prime Minister Anthony Albanese on July 13, when he also expressed concern about the same matter.
Qatar Airways 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 are at an all-time high. The additional flights would have delivered annual economic benefits of about $638mn according to the University of Sydney.
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.
According to Hrdlicka, approving the Qatar Airways request should have been granted easily.
“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 now 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.
Hrdlicka said Virgin thought the economic benefits of the extra flights would “win the day”. She had a further conversation with Minister King on September 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 travellers heading in and out of Australia who are paying too much for fares. “Some key interests may have been missed,” he said.
New Qantas Airways chief executive officer Vanessa Hudson was also grilled by a parliamentary inquiry, adding more pressure on an airline already under fire for its treatment of passengers, staff and competitors.
Appearing before a senate committee in Canberra on Wednesday, Hudson first apologised for the airline’s service levels, repeating an apology she made to passengers last week. But Senator Bridget McKenzie, chair of the committee, took Hudson to task for Qantas’ failure to make a written submission to the inquiry like smaller rivals Virgin Australia and Rex.
McKenzie then criticised Hudson, Chairman Richard Goyder and General Counsel Andrew Finch, seated in a row, for not knowing the dates of certain policy decisions inside Qantas. Neither could they name the colleague liaising with government on one particular matter. The lack of a submission and ready answers, McKenzie told them, “shows a level of disrespect.”
The inquiry — formed to investigate a government decision to block more Qatar Airways flights into Australia — on Wednesday ignited into a fiery and unrestricted attack on Qantas.
Qantas last month posted an annual profit of A$1.1bn but has seen its stock price fall as the brand and reputation suffers from a relentless wave of negative headlines. Qantas stock is down 24% from a June peak.
Australia’s antitrust watchdog is suing Qantas for allegedly selling fake seats on thousands of flights it had already cancelled. The country’s highest court earlier this month ruled that Qantas illegally sacked almost 1,700 ground workers during the pandemic. The revelations saw then-CEO Alan Joyce bring forward his retirement and step aside for Hudson, who took over the top job just three weeks ago.
Flight between Australia and Europe tickets are currently over 60% more expensive than pre-pandemic. It now costs around £1,500 for a return flight to London in economy.
Travel agents, opposition politicians, state leaders, and tourism bodies have all raised concerns about the Australian government’s decision to reject Qatar Airways’ application for an additional 21 weekly flights to Australia, accusing the government of blocking additional Qatar long-haul flights to Australia “to protect Qantas” from the competition.
Qantas objected to Qatar Airways’ application on the basis that it could “lead to the loss of Australian jobs”. Tourism organisations don’t share Qantas’ view, one telling me “the opposite is true, an increase in flights boosts the economy and our sector as a whole”.
Qantas boss Alan Joyce will soon face the Senate inquiry over his discussions with the federal government in the lead up to a ruling that blocked competitor airlines.
The author is an aviation analyst. Twitter handle: @AlexInAir
