Surprising: Qatar Airways & Virgin Australia Launch Partnership

This came from the left field.

Details of new Qatar Airways & Virgin Atlantic strategic partnership

The exact date of the strategic partnership between Virgin Australia and Qatar Airways hasn't been revealed. Virgin Australia passengers will have access to 35 Virgin Australia destinations across Australia, while the passengers of Qatar Airways will have access to more than 140 destinations worldwide.

The partnership will include:

• A codeshare agreement, whereby passengers will be able to seamlessly book itineraries that include travel on both airlines
• Reciprocal points earning opportunities, meaning that Qatar Airways Privilege Club members can earn Avios when flying on Virgin Australia, and Virgin Australia Velocity members can earn points when flying on Qatar Airways
• Reciprocal elite perks, including lounge access, extra baggage allowance, priority check-in, priority boarding, priority baggage delivery, and more

Akbar Al Baker is the CEO of Qatar Airways.

“We have a strong, long-standing relationship with Australia and this agreement with Virgin Australia comes at a time when it is needed the most. This partnership will give Australian passengers access to the world that they have so acutely missed these past two years, to be able to reconnect with family and friends, and keep the wheels of trade moving.”

This is how Virgin Australia CEO Hrdlicka describes the partnership.

“Today is more great news for Virgin Australia and Velocity Frequent Flyer members who are hungry to travel internationally. We are incredibly focused on creating great travel experiences and our new partnership with Qatar Airways will significantly expand Virgin Australia’s footprint into the Middle East, Europe and Africa, offering hundreds more ways our guests can seamlessly see the world.”

But what about Qatar Airways & Qantas?

This partnership is interesting because it fills a network gap that isn't currently served. Qantas and Qatar Airways are both part of the oneworld alliance, which means that passengers of both airlines have access to an extensive network in Australia.

This partnership makes perfect sense to Virgin Australia.

• Virgin Australia has discontinued long haul flying, so the airline is now focused on short haul flying; forming partnerships with as many long haul carriers as possible makes sense, as it’s a way to fill seats
• Virgin Australia doesn’t belong to any major alliance, and especially since emerging from bankruptcy protection, the airline seems to be open to just about any partnership that makes sense (for example, Virgin Australia dumped Delta in favor of United, given that the latter has a bigger network in Australia)
• While Virgin Australia also partners with Etihad Airways, Etihad isn’t nearly as big as Qatar Airways, and there are also several airlines that partner with both Etihad and Qatar

This partnership is a bit more confusing from the perspective of Qatar Airways. Virgin Australia doesn't offer much service that Qantas does, so the value-add for frequent flyers is limited. What is the motivation for the airline? The way I view it, there are a few possible explanations.

• Airlines are ultimately free to form their own partnerships beyond alliances; for example, Qantas and Emirates have long had a partnership, so Qantas’ relationship with Emirates has been closer than its relationship with fellow oneworld member Qatar Airways
• In general there has been some bad blood between Qatar Airways and Qantas; back in the day when Al Baker was threatening that Qatar Airways would leave oneworld, Qantas CEO Alan Joyce basically encouraged him to do so
• I suppose from Qatar Airways’ perspective, if there’s not a non-compete clause, the airline might as well form partnerships with as many Australian airlines as possible, as that will just lead to more passengers connecting onto Qatar Airways flights
• I wonder if Qatar Airways’ terms with Virgin Australia are simply better than with Qantas, in terms of revenue sharing, cost of providing reciprocal benefits, etc.; I guess we’ll see based on how booking options are prioritized
• There definitely seems to be a bit of shade in all of this, as Qatar Airways refers to Virgin Australia as “Australia’s most loved carrier”

Bottom line

The new partnership will be launched in the middle of 2022. This will include a codeshare arrangement.

It's interesting that both Qantas and Qatar Airways are part of oneworld. New partnerships are usually formed in underserved markets. I'm curious to see how this plays out, and what it means for the relationship between Qantas and Qatar Airways.

What do you think about the new partnership between Virgin Australia and Qatar Airways?