Virgin Australia claims Qatar Airways’ proposal to acquire 25% of the carrier would benefit small and medium-sized enterprises, in a clear challenge to other airlines targeting the lucrative business traveller market.
Under the long-running plan, formally announced Tuesday, Qatar Airways would obtain a minority stake in Virgin Australia from current owner Bain Capital for a currently undisclosed sum.
The plan would open Virgin Australia flight routes from Sydney, Melbourne, Brisbane, and Perth to the Qatari capital of Doha.
Virgin Australia says access to Doha would greatly expand the carrier’s long-haul international operations by opening further connections to Europe, the Middle East, and Africa.
Both parties state increased competition in the Australian aviation sector will ultimately result in cheaper fares for customers.
In a statement, Qatar Airways Group CEO Badr Mohammed Al-Meer says competition in the sector “is a good thing and it helps raise the bar, ultimately benefiting customers.
“This agreement will also help support Australian jobs, businesses and the wider economy.”
The deal remains subject to approval by the Foreign Investment Review Board and the Australian Competition and Consumer Commission.
However, its pending status has not prevented the airlines from billing the partnership as a win for business customers — including those in the SME sector.
In a statement, Virgin Australia says expanding its global coverage through the deal would provide “broader access to great value fares for leisure travellers, small and medium-sized enterprises, and corporate customers”.
The specific reference to SME flyers suggests Virgin Australia is pitching the benefits not just to holidayers and the C-suite, but to aspirational businesses looking to maximise their limited travel allowances.
The proposed deal is also a broadside against Qantas, which commands a massive number of business customers in Australia but is still recovering from significant reputational hits in the post-lockdown era.
Clusters of cancelled flights and surging customer complaints through 2022 forced then-CEO Alan Joyce to directly apologise to members of its Frequent Flyers loyalty program (Virgin Australia suffered its own share of cancellations and delays over the same period).
Like Qantas, Virgin Australia operates its own customer loyalty program and business flying program, which rewards enterprises who book flights through the carrier.
Wooing professional customers away from the Qantas Frequent Flyer and Qantas for Business systems would be a boon for a bolstered Virgin Australia.
However, Virgin Australia has not detailed any potential changes to its business customer program as a result of the proposed Qatar Airways deal.
When asked how else the proposed deal may benefit SME customers, Virgin Australia directed SmartCompany to its original statement.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
